🧐 You’re Probably Overestimating Your Chances
Why being on your consumer’s shortlist matters more than you think
“Our brains are not wired to accurately perceive probabilities.
We overestimate rare events and underestimate common ones.”
Daniel Kahneman
I came across a great illustration of this yesterday,
in an interview with a car manufacturer CMO.
They made following observations:
– Pre-purchase, car buyers have a 3-5 brand shortlist
– In 70–80% of cases, they buy from that list
– In 20-30% of cases, they buy other brands
However, the following comment struck me:
“If you’re not on the short-list, you have a 30% chance of being chosen.”
Really?
Looks high to me.
Let’s look at the numbers.
– We take a market with 20 brands.
– 3 brands on the short-list capture 70–80% of sales.
– The remaining 20-30% are split among ALL other 17 brands and their chance of being selected is roughly equivalent to their market share.
How does it look like in detail?
A. Shortlisted Brand
– Total probability of shortlisted brands: 70%
– Number of shortlisted brands: 3
– Each brand gets an equal share of the 70%
Probability of being chosen:*
70/3=23.3%
B. Not Shortlisted Brand
A non-shortlisted brand with 5% market share captures 5% of the remaining 30% of purchases.
Probability of being chosen:
5%×30%=1.5%
That’s a massive difference.
Being outside the consideration set means you’re left with a fraction of the remaining 20-30% that is roughly equivalent to your market share.
THE MISCONCEPTION
The misconception comes from thinking that all brands outside the shortlist have a direct shot at the remaining 30%. In reality, your market share dictates how much of the 30% you can realistically capture.
* 🧐 Is It Fair to Assume All Shortlisted Brands Have the Same Chance?
The assumption that each brand on the shortlist gets an equal share seems reasonable, but is not always accurate:
– If a brand dominates in visibility/trust, it has an advantage
– Ad campaigns or discounts can skew choice
– Habitual purchases might have a strong default
👉 Why This Matters for Marketers and Business Leaders
If your brand isn’t on the consumer’s shortlist before they enter the market, you’re competing for crumbles.
This means:
– Brand awareness and mental availability are key
– You need to be in their mind before they start shopping
– Being “discovered” at the last minute is unlikely
♻️ Your network appreciates a repost
—
I’m Julia Kinner
My consulting firm JK & Associates SA focuses on growth strategy and execution for digital products and services.
—
👉 Your aren’t subsribed to our newsletter yet?
Join 2’500 executives that read the “D2C CEO”
https://lnkd.in/efyXJdge
