Look Here! Perception is Reality in the Science of Decision-Making

Perception vs. Reality

What is perception after all? It is defined as a process by which individuals organize and interpret their impressions in order to give meaning to their surroundings and environment. But why is it important when it comes to decision-making? Well, because people’s behavior and decisions are based on their perception of what reality is- not on reality itself. The world that is perceived is the world that is truly important when it comes to marketing and referral. Perception is reality.

Let’s say you take a quick 36-hour trip to Vegas. You and your friends see a growing line for a club that is just off the strip- a club you haven’t heard of. The line is two blocks long. This must be the place to be. The bouncer commands you to hand over $50.00 and your ID. You do it. This place is going to be completely worth it. The line behind you is filled with attractive people, the cover is on par with the rest of the nightclubs, and people keep lining up. It’s Vegas.

You hand over your cash, your identification, make your entrance, purchase an overpriced cocktail, then discover that the dancefloor is completely empty. This place is nearly lifeless- there is absolutely nothing happening in this club at all.

The wait, the pretty people, the cover, the entire idea of what was to be expected inside did not exist. Your decisions, behaviors and actions were based on the perception of this being the new Vegas club, but reality is this just an overpriced, uneventful dive.

Your potential customers, advocates, and loyalists behave not just on the way their physical environment actually exists, but rather how it is believed to exist. Therefore, we tend to make judgments and decisions based on the validity of other people’s statements and credibility, as perceived in relation to our surroundings, just like our Vegas example.

Referred friends are more likely to “say yes” and accept a friend’s offer, recommendation or suggestion to purchase as the perception is that your friends know best. So when it comes to decision-making and referral marketing, people generally “say yes” and agree with to those they know and like. Referral campaigns benefit from this basic principle.

Does the person you perceive to be an expert, influencer, advocate or even friend have the relevant knowledge, education or experiences to make an accurate judgment? Do you trust their opinion? How similar is that person to you? Are you of the same or aspired social class? The more ‘yes’ responses we can answer, the more likely we are to be influenced by that person… and the more likely we are to make a decision that is influenced by that perception.

It is simple to see why our friends often have so much influence over opinions and purchases, since we often share similar traits with our friends. Perception really is reality. The quality of our connections and our sense of “liking” directly influences our conversion rate in purchasing decisions. Referrals are super effective because they leverage our existing relationships and trust in order to inform our buying decisions.

You will be able to read more in our soon to be released e-book available for download in early July. Stay tuned, and subscribe here to be the first to know when this publication is available for you!

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