548: Avoiding Snap Decisions: Overcoming Recency Bias
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How do you avoid letting the present overshadow the past and future in your business? In this episode, we dive into the concept of recency bias and its impact on decision-making. We discuss how relying solely on recent experiences can lead to emotional exhaustion, poor decisions, and skewed priorities. By balancing intuition with data, setting clear boundaries, and reviewing long-term trends, you can make more informed choices for your business. Overcoming recency bias is essential for building a thoughtful, sustainable, and successful business.
Main topics:
Impact of Recency Bias
Balancing Gut and Data
Emotional Exhaustion and Decision-Making
Consistency in Client Feedback
Long-Term vs. Short-Term Goals
Main takeaway: Recency bias keeps us focused on the present, but it can cloud our ability to make informed, long-term decisions.
Recency bias keeps us focused on the present, making it easy to give more weight to what's happening right now than the bigger picture. While staying in the moment is important, it can cloud our ability to make informed, long-term decisions for our business. Have you ever made a choice based on a recent bad experience, only to realize later that it didn’t align with your goals? The key is to balance gut instincts with historical data and trends. Take a step back, review your year as a whole, and ensure your decisions are grounded in both context and strategy.
Links:
https://journals.plos.org/ploscompbiol/article?id=10.1371%2Fjournal.pcbi.1009517
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
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SUMMARY KEYWORDS
Patreon supporters, recency bias, emotional exhaustion, client feedback, decision making, long term goals, performance metrics, data analysis, gut instincts, client retention, staff retention, marketing campaigns, regular check-ins, business growth, data trends
SPEAKERS
Meghan, Collin
Meghan 00:02
Hi, I'm Meghan.
00:03
I'm Collin,
Meghan 00:03
and we are the hosts of pet sitter confessional, an open and honest discussion about life as a pet sitter. We want to thank pet sitters associates for being the sponsor for today's episode, and we want to thank some very special people our Patreon supporters. These people have found value in the show, and they support us financially each month. These are people like Jennifer, Alicia, Teresa, Sherry, Katie and Savannah. Jennifer, you are our longest supporter as a Patreon member. Thank you for being that your support over the last four years has meant so much. We are incredibly grateful and thankful for you. With our Patreon membership, we have two different tiers, a $5 and a $15 a month. The $15 gets you on our monthly zoom meetup and early access to episodes and some extended interviews as well. If you enjoy the podcast and you'd like to see it keep going, you can go to pet sitter confessional.com/support, to learn more. It's almost the end of 2024, and it's that time of year where we all begin to reflect on how the year has been. Has it been really good, lots of revenue, lots of new clients, or has it been not so great year? When we tend to reflect back on how a year has been, what tends to happen as we answer that question is we immediately think of what's happening right now, and the further we try and go back, the harder it becomes, and the more unreal it becomes, almost like it didn't even happen. Like, think back, can you remember how busy you were in April? Because I think we were pretty busy, but I don't, I don't remember exactly what our revenue for that month was without pulling a report. Couldn't tell you for sure. Absolutely, because of this, we give more importance to the most recent information than historic information. So we're ending the year with the major holidays, Thanksgiving, Christmas and New Year's, those tend to be a lot busier for pet sitters and dog walkers. So we think, Oh, this year was good on hold because we are busy right now. But that may not be the case. You need to run the reports and run your numbers to see exactly how the year shaped up.
Collin 01:57
And it's not just about busyness. It can be about how you are personally feeling. It can be about struggles that you have had, lessons that you have learned when we when we ask this question of, how has the year been for you? We reflect on all of that. Yes, the busyness. Are we up? Are we down? What's converting? What's not converting? But how are we feeling emotionally as well? What are our are we feeling burned out? And so when we ask this question around the holiday period the end of the year, many times people will say, Oh, this year was terrible because I'm not sleeping and I've got these really long days and I'm getting all these new client inquiries and all these requests, and it's just a lot of rush, rush, rush, rush, rush. But if you look back over the course of the entire year, it might not have been like that. And if you would have asked this same question back in April or March, they may have said, Oh, I'm loving this right now. I've got a good balance, and everything's going really well. This whole thing that we're talking about is known as the recency bias. Recency bias is a cognitive bias that actually favors recent events over historic ones. You can think of this as the tendency to focus on the most recent events or experiences, and we give them undue weight when we do an analysis and try and think of how things are currently going
Meghan 03:08
well, because we're dealing with it right now in the moment. Oh, things are really busy. I feel hectic. I feel rushed, because we typically draw our emotions from what we're experiencing in the moment. It's hard to think, Okay, on May 30, how was I feeling? But I can tell you how I was feeling today or yesterday. Yeah.
Collin 03:26
So back to that question. How has 2024 been to you? You're going to answer how, basically, the last week has been or last month has been. You're not going to answer how January was for you or February was for you. Recency bias is actually pretty insidious, because there's two there's two sides to this. I don't want to say it's a paradox, but it is kind of a catch 22 in that the most recent information is the most important, because it's what we're experiencing now, the most recent data trends on consumer reports and what our clients are looking for and what the trends are and where the industry is going. The the here and now is exceptionally important for how we're going to operating, because this is linked to our survival instincts. From an evolutionary perspective of we have to know what our environment is and be ready for that and acting in that if we're too far off in the future, or if we're always living in the past, we're never going to be responding appropriately to what we're experiencing here and now. However, if we are only responding to what's the here and now, and we are only basing all of our opinions off of what we are experiencing in this exact moment, we end up damaging our long term impacts, or our ability to think long term given the historic perspective and past experiences that we've
Meghan 04:37
had, we do tend to be bad at keeping that sequence of events separate. So our brains bias the recent what's happening right now, because it's what we're experiencing, so it must be the most important, right? Well, not, not, not necessarily, right. It may not seem like it, but this does matter a lot in pet care, things like when we overreact to a recent negative review while ignoring long term positive. Feedback. We focused, oh my gosh, this one client yesterday left me a really bad review, and it's all I didn't get a lot of sleep last night because I've just been focusing on this. But I also have a back stock of 80 reviews that are all five stars and wonderful, but it's the one that's really dragging me down.
Collin 05:18
I know we got our one star review from a disgruntled person who never used our services ever. And, you know, it doesn't feel good, you immediately feel pretty crummy about this. And it's honestly taken five or six or seven more five star reviews from just me personally to finally dig out of that and not feel like, you know, we let somebody down and that, no, we actually do really good work. There's
Meghan 05:40
also the example of prioritizing a recent client request that's unusual over our standard operating procedures. Maybe we took on an indoor outdoor cat situation, but our policy and contract says we don't do that. But because it was the holiday time and you weren't as busy as you thought you were going to be, so you took on this last minute client, it usually doesn't turn out too well.
Collin 06:02
Yeah, it's when we ignore that long term experience, when we ignore our standard operating procedures, and we go, well, this isn't something that I normally do, but because it's urgent and because it's happening, and you just asked me this, and you need me tomorrow, I'm going to prioritize your request over and against what I usually do, and this is where those strong boundaries really come into play. And having when we talk about getting standard operating procedures, it really is important for you as a business, whether you have employees or whether you are a solo business, because this is where you get things down in black and white in writing, of what you are committing to. It's basically think of it as a promise to yourself of how you will always act in certain circumstances, and this is what allows you to have this know when this situation comes up, when this indoor, outdoor cat situation comes up. I'm not going to take that on, no matter how urgent their request is, but we do get caught up because it's the holidays or they need us today, or we'll just let it slide this one time and because it's happening right now, we ignore everything else and just move forward.
Meghan 07:07
Yeah, we ignore all of our past experiences that said, Oh, this is not going to be a good idea. We make those snap judgments and decisions based on a single bad or good experience. If you have a mean greet that goes wrong with a certain breed of dog. You shut off that dog. You say, I don't want to do those anymore because of this one bad experience. Or if you tried hiring and the person didn't work out for whatever reason, and you say, Okay, well that didn't work out. I'm never gonna hire again. It just wasn't for me. I'll just remain solo.
Collin 07:38
Or maybe you were trying out some equipment and it works flawlessly. And so you go, Well, this was an amazing experience, so this is now the only thing I'm ever going to use for now and forever, both in good and bad experiences, these situations are snap decisions, because we ignore long term data. We're not thinking about the past or projecting out towards the future in any of these scenarios. We'd like to tell you
Meghan 08:00
about our friends at pet sitters associates as pet care professionals, your clients trust you to care for their furry family members, and that's why pet sitters Associates is here to help. For over 20 years, they've provided 1000s of members with quality pet care insurance. Because you work in the pet care industry, you can take your career to the next level with flexible coverage options, client connections and complete freedom in running your business. Learn why pet sitters Associates is the perfect fit for you, and get a free quote at pets@llc.com you can get a discount when you join by clicking membership Pet Sitter confessional, and use the discount code confessional when you go to check out, check out the benefits of membership and insurance once again at pets@llc.com when you think about how 2024 has been for you, or whatever the question is, but you have to stop and think, not just in the moment right now, but when it's a long term question. You have to take that next logical step and go, Okay, let me think back to everything in that question and then answer it. Or
Collin 08:55
in these situations where we just walk through if we don't take that next step to then think about the context, then think about the history. That is an intentional act. And if we don't do that, we'll only ever be dealing with the here and now, the most recent immediate thing, constantly acting and responding to what's going on, instead of putting together a long term plan and ultimately making really bad decisions.
Meghan 09:19
Yeah, it's like one of my favorite phrases, be proactive instead of reactive. You don't want to be reacting to just what's happening right now. You want to be proactive and go, Okay, let me look back, let me take a broad scope at this, and then I can have a plan for moving forward. So
Collin 09:35
there are a lot of dangers from having this kind of bias and not being aware of it. And I think one of the first ones is just an emotional exhaustion from frequent shifts in focus, because we are constantly moving from newest information to newest information to newest information, and not taking a moment to just collect everything and then think about it. It's emotionally exhausting to just be experiencing everything in real time instead of being able to. To compartmentalize, to think about, to intentionally take that step, to go. How has this happened before? How then should I respond instead of just always responding and being
Meghan 10:12
reactive? That does lead to poor decision making due to skewed priorities? You think, oh, okay, well, I'm super busy right now, so I need to make sure I take a break. But then you remember that, oh, the break is actually coming after the holidays, so when you aren't thinking broader, it can hurt you, yeah,
Collin 10:29
or maybe it's the really slow period, and you basically are making all of these poor decisions based off of being slow. And you hurt your business because you're not going out in marketing, because you don't feel like you're actually going to get any busier. Your priority is for the here and now, as opposed to, how can I grow in the future, or what happened last year this time, and why was it so slow? You also end up straining client relationships because you're inconsistent, because you are not thinking long term. You're not thinking, How did I handle this last time? How did I respond to this last time, everything tends to be new and in the moment and not grounded in anything, but
Meghan 11:05
it can be hard when you are really busy and you don't have time to ask people for reviews or to get their feedback on the new initiative that you did, because you're so busy right now that we maybe during the slow times, we focus on that, but not during the busy times. But it really does need to be a consistent message that you are projecting to your client so that they know you always are wanting that feedback from them. Because I think the worst case scenario is you get to the slow times and you really want their feedback, and you're because you're kind of panicking that, oh, I'm not going to get busy again, and all my clients are starting to leave me. So that panic that you're having comes through in the messaging on your social media and in your emails to your clients. Of, okay, where are you guys? Let's let's get drum up business and book. And then clients are kind of freaked out because they're like, we're still here, but we just don't need you right now. So that consistency is important. Yeah,
Collin 11:55
basically, what this is doing is the biggest danger here is twofold. One, it's you lose sight of your long term goals and your values, because you're only thinking about here now. You're only concerned about here and now. And what this does then is it's all because you're forgetting context of events, of conversations, of past and present. Everything is just new. The example that you gave Megan of I'm slow right now, if we don't take that next step to think about what happened that time last year. You're right. We do respond in a panic. We do respond in a rush. This hurts our business, because we come across as desperate, and clients don't like that. Potential clients don't like that feeling, which kind of furthers and deepens and becomes another bias in our business. Of things are going down. So until we can put this into context of what is my slow period? What is going on right now? When do I get busy? And how do I understand that? Until we do that, we will continue to act rashly and inappropriately. But thankfully, there are a lot of strategies to overcome a recency bias in our business and for us personally, I think the biggest one for me is to keep some sort of journal so that you can recognize patterns over time. What I like to do is I like to put things on my calendar for events that I'm doing that day. I don't like to write them on pen and paper. I'll put them on my digital calendar of when I'm doing visits. I will put them there, or I'll put the administrative work that I'm doing or the meetings that I'm going to so that I can look back to one month ago, two months ago, three months ago, and see what was my What were my weeks like then? How frantic was I working, and how much was I driving around, versus what I'm doing right now. It gives a great way to keep track and log that kind of activity.
Meghan 13:37
When we are able to refer back to those notes, it can give us relief of going, ugh. I know I can remember exactly how I felt in this moment. It's not as bad as I think it is right now, or it was worse at a time, but we can build in those decision making pauses, you know, we can sleep on it, think about it, make sure it's the best decision. Maybe even go to an external source, a friend or a family member or a mentor to run the idea by, it can be tempting to navel gaze, but when we get that outside perspective from somebody going, Ah, that's not really the best decision. Or have you thought about this, we can get fresh eyes on the potential pitfalls that we may run into that we aren't seeing because we're just focused on how we're feeling right now, when
Collin 14:21
it comes to overcoming recency bias in our business, one of the first things that you can do is make sure that you are regularly reviewing your metrics instead of just relying on our gut feelings. Now I will say that it is important for you to have a reckon of what's going on and ultimately new. You know your business best. You have a long term history with your business, you have seen things, you've exp you have a lot of experiences. Metrics can and will only ever be able to tell you so much. However, the real power comes in when we overlay our personal experiences on top of the metrics, so we can make sure that they are matched up. I know one of the things that I used to do when I was teaching is. When we would finish an exam, I would always ask the students, how do you think you did? Give yourself a grade on what you feel like you did. And then when I handed them back their graded test, we could see how off were you? Because what this actually allows you to do is go, how is my gut? Do I really understand myself? Am I really present and in the moment? Do I understand what's going on, or do I need to make some recalibrations and adjustments here so that I can make sure that I'm hitting the things I need to and make sure I'm doing well? One
Meghan 15:30
of the things we did a few months ago is I had this gut feeling that we had retained more employees this year than we did last year, and we weren't sure, so we went to our metrics and we confirmed Yes, my my gut feeling was correct, and I was glad about that, but, but because of this recency bias, our gut doesn't always remember the things from the past, because we're just reacting sometimes to what's the here and the now, and
Collin 15:55
so it can't be trusted. And then we make decisions basis based off of our gut, but we're not making decisions based off of the right things, so having the metrics with your gut instincts allows you to make really powerful decisions
Meghan 16:07
well, because we do often say, trust your gut. So there are feelings that you have when you go to make decisions that you may not have any past numbers to run, or you just want to jump into this new initiative that you're doing, or new services you're offering, without having really any numbers to back it up, or any experience from the past to say, Yes, this is the right decision. Or no, it's not. So there is this part of trusting your gut that is important. Yeah,
Collin 16:34
there is your intuition. Again, you know your business, and you do have an intuition of what is going to be the best decision, especially about decisions for the future, data can only help you so much of leading you up to the point where the data stops, and then you have to take that and you have to be the one that interprets it, internalizes it, and makes a decision about how you're going to move forward with that. That is where the gut comes in. That's where the intuition comes in, and where your ability to make sound decisions based off of that, but this decision making process is what we're doing here, is we are actually making a framework that weighs data over and against recent events. Because a great example for this is people go. How do I know when I need to hire? I feel really busy right now. I'm really swamped right now. I can't handle this right now. I'm gonna hire right now. But if you actually looked at your metrics, you may find that you're not actually growing consistently enough to bring somebody on right now, and you need to work on some other things to get to that point. Or you may look and find no actually, I have grown 45% over year over year, and I need help desperately because I can't keep this pace. But you won't know that until you look at that data instead of just relying on right now, how am I doing and making a decision based off that
Meghan 17:54
if your software cannot run reports, detailed reports about your numbers and track metrics, you need to get a new software, because this is going to be critical. When you are able to run those reports, it's not only going to tell you and inform your decisions in the future, but it's going to highlight where you have been as well.
Collin 18:12
Yeah, practically, one of the best things you can do is leverage technology, leverage software so that you can look at trends, you can look at data and patterns across time, because, again, we're really bad at putting in those sequential things of how they happened. We lose track of where things are. If we try and keep it all in our head and our reckon, our gut will be slightly biased to towards the most recent information. Again, recency bias is good in that it keeps you present in the here and now. It keeps you surviving and thriving and connected to the most current information. It's really dangerous when we have to make long term views and think about goals and performance moving forward based off of past experience and see where Where am I headed. Recency bias blocks, and it actually clouds our ability to do that and see clearly through that. So we have to do what we can externalize is what we're doing. We need to externalize the data, the information. So then we can't we can be the third party looking at the data and the information.
Meghan 19:18
So if you haven't done your goal setting for 2025 you need to do that review your long term goals, your 510, year goal. Are you still on track to hit those or was this year 2024 was it kind of sideways a little bit for you, and you need to get back on track? Yeah. What
Collin 19:33
are those performance metrics that you're going to be tracking? What is your profit margin? What are your labor costs? How much are you driving? What are you charging, and everything in between, so that you can go, you know your client acquisition, or your you know client retention, staff retention, if you have staff, what does it take you to get that so you can see? Well, in 2024 it took me $700 to acquire a new client. But in 2023 it took me 300 Dollars. Well, what happened? What's going on? Let me figure this out that gives you real power, that gives you real information to work with.
Meghan 20:07
Well, and I know not all of us are number crunchers or really enjoy the analysis of this, so I wonder if there's somebody out there that can help what you
Collin 20:15
hire a CPA, you work with a tax accountant, you work with a virtual assistant to help you with this information, you need to provide them with the raw data, with your bookings, with your income, with your revenue, with all of these things, and then they can crunch it for you. They can work with it. You can also download people have different spreadsheets, and there are different softwares that can help you calculate these or run reports to get these. But when we talk about being data and information savvy. It is actually very important to us. It is beneficial to us. And there's just basic information, something as simple as, how many bookings do I have this year compared to last year? Just knowing that allows you to see what's going on. To say, I'm 20% up, I'm 50% down, I'm still the same. Great. This gives you something, a measurement of how things are going on. It's like when you walk into the doctor, they want to see your trend of your temperature over the course of the time that you're sick, so that they know, is the fever getting worse? Is it getting better? Has it broken as I try different medications or different routines, how does that impact the temperature in the fever? Unless you know the temperature, you have nothing to gage anything that you're doing off of, and then you're just blowing in the wind. Use
Meghan 21:26
client reviews and staff check ins as part of structured evaluations, not as reactionary changes, because when you say, I'm going to ask for client reviews every the next week after they get back from a pet sitting vacation, okay, that's never going to change. You know that it doesn't matter if the client, when they got back, sent you a message saying thank you so much for taking care of fluffy or if they didn't say anything at all, you are still going to ask them for a review. As far as employee check ins, you know that you're going to do it whether something good happened, bad happened, it didn't matter. Every month, you're going to check in with them and ask how they're doing and how they feel about their growth in the company.
Collin 22:03
I tell this to every new employee. We do have regular check ins, so do not stress out when we schedule that for you, it's going to happen. And I tell them the schedule that it's going to happen the days, the months, these things so they know it's coming and that we say, this is just a time. This is a pre scheduled time for us to talk about everything good that's happened and everything bad that's happened. Because what you don't want to do is just always schedule the meeting after a staff member has messed up. That's not a good look, that doesn't make anybody feel good. And as far as clients go, you see it where companies try a new marketing campaign, or they do a new product and it blows up in their face. And then what do they do? They send out the client surveys, and they say, We want to hear from you. The only reason they want to hear from you is because they messed up and they need to get back on track. Why not have regular check ins with your clients so that you know and can make micro adjustments before big things happen?
Meghan 22:57
It is important to avoid this recency bias in your business and in your personal life as well, so you can make better decisions moving forward and not just focusing on the here and now, but the entirety of the picture. If you have overcome recency bias in your business, you can email us at Pet Sitter confessional@gmail.com or look us up on Facebook and Instagram. At Pet Sitter confessional, we appreciate you listening to this today. We hope this episode is helpful, and we appreciate you joining us today. Thank you also to pet sitters, associates for sponsoring today's episode, and we will talk with you next time bye. You.
