What is Hindsight Bias How Does Hindsight Bias Apply to Marketing

What is Hindsight Bias? How Does Hindsight Bias Apply to Marketing?

Also Known As: The “knew-it-all-along” effect, or creeping determinism.


Hindsight bias happens when someone sees an event as predictable and happens as they guessed it would, even if they have little to no objective reason for making that prediction.

Hindsight Bias Examples:

Honest Marketing. Customers must hit a point where they select a product or service and are so satisfied that they congratulate themselves. These customers are genuinely happy that they bought your product. They feel that the value they receive was worth more than the price they paid.  You want them to be at the point that they are telling their friends, “I knew this would be the best company to buy from.”

Discounting. Businesses may assume that discounts increase revenue. This may be the case, but there are also adverse effects. For example, you may condition customers to expect discounts. This means that they will only spend money when there is a sale. Now when you try to take discounts away, your revenue may drop dramatically. This is exactly what happened to JC Penney’s revenue in 2012.

Inconclusive Experiments. Faulty experiments often lead to bad results. For example, it’s easy to identify something as a “win”, fudge numbers, or simply be left with inconclusive data. As you look back on the results, you’ll use hindsight bias to justify why things happened the way that they did. This is why it’s best to establish guidelines on what is successful and what is not.

Let’s say I set up an experiment to see if including an image in my email newsletter increases click-through rates. If the CTR increases when an image is included, we may attribute the cause to the image. However, I have not considered the subject line, call to action and a variety of other factors that may have contributed to the increased CTR. This is why it’s important to add objectivity to your ideas and properly set up campaigns.

See Also: Curse of knowledge, Egg of Columbus, Historian’s fallacy, Memory conformity

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