By Sam McNerney
Fortune.com selects the most compelling short essays, anecdotes, and author interviews from "250 Words," a site developed by Simon & Schuster to explore the best new business books—wherever they may be published.
FORTUNE -- It's easy to confuse what you don't see with what doesn't exist. In a fascinating new book, The Improbability Principle: Why Coincidences, Miracles, and Rare Events Happen Every Day, published this month by Scientific American/Farrar, Straus and Giroux, David J. Hand imagines a survey company that wants to figure out what percent of magazine readers reply to surveys. The company publishes a poll ("Do you reply to magazine surveys?") and bases its conclusions on the number of people who answered "Yes." A better survey would account for the percent of people who don't take magazine surveys at all. But surveys can't account for the people who ignore surveys.
Hand's example illustrates a bias that bedevils how businesses perceive their customers. I'm fed up with my Internet provider because my Internet speeds are slower than the ones I paid for, but navigating their customer service to file a complaint would be a nightmare, so I simply don't do it. I bet my Internet provider doesn't receive as many customer complaints as they should because it's difficult for customer to complain in the first place.
In 1938, the general interest magazine The Literary Digest went out of publication after committing a similar error. The magazine conducted a poll and incorrectly concluded that Governor Alfred Landon of Kansas would win the 1936 presidential election. The Literary Digest only polled its own readers, who tended to have higher than average income and voted Republican. Furthermore, part of the polling was done through telephones, which only high-income voters owned.
It's tempting to conclude that if one group of people has something in common an entire population does. But if you want to understand your customers better or how people perceive your brand you cannot only pay attention to the people who are talking. You've got to listen to the people who aren't. To paraphrase Hand, a business should never mistake what they see (happy customers) with what is there (many unhappy customers).
More from 250 Words:
Fortune.com selects the most compelling short essays, anecdotes, and author interviews from "250 Words," a site developed by Simon & Schuster to explore the best new business books -- wherever they may be published.
FORTUNE -- 250 Words' Sam McNerney sat down with Barry Werth, author of the new book The Antidote: Inside the World of New Pharma, a deeply reported tale from within an upstart drug company, Vertex Pharmaceuticals (VRTX), and the ferociously MOREFortune Editors - Feb 11, 2014 2:53 PM ET
|GM's recalled Cobalt was a failure from the start|
|Michaels hack hit 3 million|
|Walmart offers cheaper money wire service|
|Why you should pay off your car loan ASAP|
|Americans have fallen in love with real estate once again|