fbpx

Planning Fallacy

Imagine this…

It’s the middle of Q2 and sales are lagging.

If you can’t get a new influx of buyers in the next month, you’ll miss your growth goal *whomp whomp*

You decide to experiment with Google Ads.

You’ve never set up a Google ad before, but you’re a fast learner so you decide to do it yourself rather than hiring a specialist.

You set aside 5 hours to get your first ads live. That’s lots of time, right?

Unfortunately not. Three days later—and 10+ hours of reading blog posts and troubleshooting—and you’re still working on it. Darn it.

Finally, you hit the pretty publish button and your ads go live.

You wait a week to see the results… but they’re not good. Your conversion rate is way lower than you thought, and the ads cost much more than anticipated.

You’re disappointed, but you know this is all part of the game.

Rather than giving up, you decide to test a few more campaigns until you find something that works.

Knowing that it took you 3 days to publish your ads the first time…

How much time do you set aside for the project this time?

In today’s edition of Why We Buy, we’re exploring the Planning Fallacy – why we’re constantly underestimating how long it will actually take to finish tasks and projects.

Let’s get into it…

“Top Marketing Newsletters You Need to Subscribe To”

The Psychology of Planning Fallacy 🧠

We’re wired for positivity and optimism, which makes us believe we can do more in less time with fewer resources. This is called the planning fallacy.

Even if you’ve already seen how inaccurate your predictions were in the past, you’re still likely to underestimate how long projects will take or how many resources you’ll need the second time around.

Psychologist Daniel Kahneman, whose book Thinking, Fast and Slow you’ve probably heard of (or read), discovered the planning fallacy in 1979.

The Psychology of the Planning Fallacy

The planning fallacy appears in all areas of our lives. It’s the reason why 80% of startups fail to reach their goals.

And it’s why people end up spending thousands more on home renovations than they anticipate.

Guy Kawasaki, the author of Rich Dad, Poor Dad, understands how the planning fallacy affects businesses. He says, “As a rule of thumb when I see a projection, I add one year to the delivery time and multiply revenues by 0.1.”

Inside Your Buyer’s Mind 🧐

Your buyers aren’t immune from the planning fallacy.

Just like you, your prospects and current customers are often wildly ambitious when it comes to setting project timelines or estimating how long it will take to get value from your product.

They may visit your website or sign-up for a free trial. But if it takes longer than expected for them to get results or take the next step, they may bounce.

It’s your job to set clear expectations for buyers and to make getting started as pain-free as possible. Otherwise, they may get frustrated and walk away.

How To Apply This 🤑

Alright, so how can we apply this right now to sell more?

Embrace delegation

Where are YOU falling into the planning fallacy? It’s easy to add a new task to our project management software and click a due date. It’s harder to meet that deadline when you and the team are busy with dozens of other projects.

The book, Who Not How: The Formula to Achieve Bigger Goals Through Accelerating Teamwork, argues that rather than trying to figure out how to do something yourself, leaders who want to scale should delegate when possible.

Embrace delegation

Delegating more tasks to experienced people frees up your time and allows you to refocus on the most important stuff.

(Pssst: If scaling ads for your B2B SaaS biz is on your to-do list, consider delegating the work to Kamil Rextin at 42/Agency)

Delegation - Twitter

Monitor product usage

People will cancel subscriptions if it takes them much longer than expected to use or setup. Subscription businesses should monitor usage to adjust trial periods and outreach as needed to retain more users.

Leadpages noticed that users who struggled to launch their first landing pages would be more likely to cancel. To help more users to succeed, they offer 1:1 feedback from experienced marketers—super smart, right!?

Leadpages

Create small wins

Breaking big, scary projects into smaller steps can motivate people to keep going when things don’t happen as quickly as they hoped.

Nathan Barry, founder of ConvertKit, and I recently chatted about creating small wins. Nathan saw the power of small wins firsthand after publishing his course on how to write a book. He was surprised to see readers’ were willing to spend much more to get access to a checklist.

What was so special about that checklist? It was a breakdown of the book writing and launching process into small daily, weekly, and monthly steps.

Small wins can push people to achieve big goals.

The Short of It 💥

People underestimate how long tasks and projects will take and how many resources they’ll need to complete them.

The planning fallacy leads to disappointment and may cause customers to cancel subscriptions or put projects on hold if they can’t get results as quickly as expected.

Assume your buyers will underestimate how much effort is needed and strategize how you can help them to get value quickly.

Until next time, happy selling!

Pssssttt…

 

Wanna really get inside your buyer’s head?

There are a few ways I can help:

  1. Get explosive clarity about what works with buyers by learning how to conduct 1:1 Clarity Calls (2000+ happy students)
  2. *NEW* Learn how to mine online reviews from real buyers to generate ideas and copy that converts (250+ happy students)
  3. Book a 1:1 strategy call with Katelyn and get the answers you need to get unstuck and move forward with confidence

Thank you to our featured sponsors

Written By Katelyn

Katelyn Bourgoin is the CEO of Customer Camp, a 4X founder, and a cheese lover. She lives by a simple mantra: whoever gets closer to the customer wins.

Related Posts

Blemishing Effect

Blemishing Effect

Let’s explore the Blemishing Effect—why we are more likely to believe positive information when a little negative information is added into the mix.

Red Sneaker Effect

Red Sneaker Effect

Let’s explore the Red Sneaker Effect—why breaking established social conventions signals higher status.

Hyperbolic Discounting

Hyperbolic Discounting

Let’s explore Hyperbolic Discounting—why we choose immediate (and often smaller) rewards over those that come later.

Affect Heuristic

Affect Heuristic

Let’s explore the Affect Heuristic —why we make decisions based on our emotions.

Choice Paradox

Choice Paradox

Let’s explore the Choice Paradox —why having too many choices can lead to fewer sales and fewer happy buyers.

The Ostrich Effect

The Ostrich Effect

Let’s explore the Ostrich Effect —why we avoid bad news rather than facing it.

Humor

Humor

Let’s explore humor —why we build better relationships with people (and brands) that make us lol.

Color

Color

Let’s explore color — why we are influenced by the colors we see.

Endowment effect

Endowment effect

Let’s explore the Endowment effect —why we overvalue things we own.

Subject Lines

Subject Lines

Let’s explore Email Subject Lines – how to write email teasers that actually get opened.

Comments

0 Comments

0 Comments

BECOME A MINDREADER

Wanna get inside your buyer’s head? Join our newsletter and get one customer psychology tip delivered straight to your inbox each week. It’s like a 2-min workout for your brain.

You're in. Giddy up! 🤠

Become the go-to customer EXPERT

If you can figure out what makes people tick, click and buy, you can make bank

We’re often asked if we offer a certification program teaching our in-depth research methods. The answer is… not yet. But we’re working on it.

Want first dibs when we launch our new certification program? Jump on the waitlist.

You're in. Giddy up 🤠

BECOME A MINDREADER

Wanna get inside your buyer’s head? Join our newsletter and get one buyer psychology tip delivered to your inbox each week. It’s like a 2-min workout for your brain.

You're in!

BECOME THE GO-TO CUSTOMER EXPERT

If you can figure out what makes people tick, click and buy, you can make big $$$. We're working on a new research certification program. Want first dibs when we launch it? Hop on the waitlist.

You're in!

JOIN WAITLIST

Wanna get the buyer insights you need from key stakeholders (and look like a boss)? Our new Stakeholder Mining Kick-off Session training is coming soon. Join the waitlist to get first dibs.

You're on the waitlist! We'll reach out soon!

JOIN WAITLIST

Wanna get the buyer insights you need from key stakeholders (and look like a boss)? Our new Stakeholder Mining Kick-off Session training is coming soon. Join the waitlist to get first dibs.

You're in!