Jeremy Smith Feb 19, 2019 11:29:35 AM 23 min read

Competitive Matrices: Psychological Consequences & Conversion Dangers

Let’s just get this straight: There aren’t any conversion optimization best practices.




Why do they do it, you ask? Because they’re full of themselves.

I just want to go on record as saying that “best practices are BS,” and if you’re blindly running after every best practice, then you’re going to wind up disappointed or disillusioned.

I’m writing this article to combat an issue in conversion optimization known as the “competitive matrix.”

What the hello is a competitive matrix?

Don’t tune out just yet. “Competitive matrix” sounds as unsexy as old socks. It’s not this kind of matrix at all.

The matrix

(Image source)

It’s something that Dwight Schrute is likely to talk about — not something that you’d bring up over a beer and barbecue.

competitive matrices are crap

So, what is it?

You’ve seen them before. They look like this:

Tablet comparison matrix

The Competitive Matrix Defined

The competitive matrix is basically a chart that lists all the virtues and awesomeness of your company in comparison to the lack of virtues of the competition.

Entrepreneur defines it as “a chart that compares your product or service to your competitor(s).”

competive matric defined

These charts are just about as common in e-commerce as acorns in an oak forest. They’re tragically accepted as one of those “best practice” lies, without giving a second thought to whether they work or not.

The Competitive Matrix Defended

Yet they are the darling techniques of many businesses.

Take this, for example, from All Business:

One of the best tools you can use to define new opportunities for growth is the Competitive Matrix Analysis. Using it will help you find opportunities to innovate with new or improved products, services and marketing strategies.

Many industry “experts” suggest that the competitive profile matrix (CPM) is a standard part of doing business, and an excellent way to attract customers.

industry experts

(Image source)

But let-s ask some hard questions. Rather than accept this fixture of business, let’s actually do some peel-back of the layers of gushing praise, and see if there’s any risk to the competitive matrix.

The Psychology of Comparison

Let me state an obvious fact, and then I’ll dish up the not-so-obvious goodies.

Here is the obvious fact: A comparison chart compares two or more products.

When a customer sees your product compared to other products from other brands, the customer becomes aware of those other brands and products.

When the customer becomes aware of the competition, then your product is not the only one in the customer’s purchasing consciousness. Now, there is more than one choice.

At first, the customer thought, “This product is awesome. I will buy it.”

Then, they saw your cute comparison chart, and they thought, “Oh, neat. Two companies sell widgets. Maybe I shall buy the widget from the other company.”

Did the comparison chart sway the customer’s mind?

Let’s unpack my Pandora’s box of psychological marvels. Hang on. I’m about to show you why the comparison chart is jack.

Scenario 1: A customer was going to buy from your competitor, but then they saw your comparison chart. What happens next?

Outcome: The customer strengthens their commitment to buy from your competitor.

Did your comparison chart work? No. Here’s why.

Humans suffer from a cognitive bias known as the "backfire effect." When a person faces facts or evidence that go against something that they have intended to do or believe, they strengthen their resolve against the counter evidence.

Matrix as the backfire effect

The backfire effect is a subset of the confirmation bias, and more precisely defined this way: “Given evidence against their beliefs, people can reject the evidence and believe even more strongly.”

I’ve discussed the issue in detail over at Roger Dooley’s blog, if you want to check it out. Smart people at Columbia Journalism Review wrote about it, too.

In other words, your comparison chart did the exact opposite of what you intended it to do. Comparison charts don’t correct wrong beliefs. Instead, they confirm existing beliefs.

Scenario 2: A customer is going to buy from your competitor, but actually wants more features in the product. Then they see your comparison chart, proving that you have more features than the competition. What happens next?

Outcome: They still don’t buy from you.

Why not? You clearly have more features, right? The evidence is strong!

Ah, but there is the cognitive bias of conservatism or belief revision. The cognitive bias states that a person will over-weigh the base rate and under-weigh the new sample evidence, thus revising their belief only slightly in the face of new evidence.

Although the evidence is strong to prove that your product is superior, the customer is not sufficiently moved by the evidence to change his mind.

For example, when a customer sees a comparison chart like the one below, she may see more features.

She does not respond logically and pick the product with more features. Why? Because of the conservatism bias that limits her ability to change her beliefs that drastically or rapidly.

Scenario 3: The customer thinks that your competitor’s product is better. Then they see your comparison chart, which proves the opposite. What is the outcome?

Outcome: They come away thinking that your competitor is better.

WHAT?! How could this happen?! How face-palmingly stupid can people be?

Here’s how it could happen: The illusion of validity.

The illusion of validity states that any information acquired after someone has made up their mind uses that data to reinforce their own belief.

Let me show you how this could happen. A customer wants to buy WebEx. Then they see this chart ...

The illusion of validity.

They see that WebEx, their preference, can’t do instant web presentations to yadda-yadda-they-tune-out-and-don’t-read-it-and-don’t-care-and-WTF …

They take that point as evidence to favor their choice, not to denigrate their choice.

Are they being stupid? No. They are just acting in keeping with the reality of their cognitive biases.

A Stanford study says that comparison can easily backfire.

But why take my word for it? Let’s find out what the smart dudes in the white coats at Stanford University think about this.

Two Stanford researchers decided to find out, once and for all, whether asking customers to compare was a good thing or not.

They sold some CDs on eBay, and let the customers do their own comparison. It happened unintentionally.

Here’s how it went down.

They sold “The Wall” at a starting cost of $1.99.

the wall cd test

For test A: They put two other copies of the same CD on either side. Each CD had a starting bid of $0.99.

For test B: They put two other copies of the same CD on either side. Each CD had a starting bid of $6.99.

What happened?

The CD flanked by the higher-priced copies of the recording always fetched higher prices.

Why? Because customers were making comparisons in their mind, and allowing those comparisons to influence their conception of the value and their willingness to pay a given price.

Not bad, huh? Cool trick.

cool trick bro

Ah, but wait. The plot thickens. Since the implicit comparison worked so well, the researchers decided to turn it into a more overt marketing effort.

Instead of just letting customers see the comparison, they made sure that the customers didn’t miss it by telling them to compare the low price of the $1.99 CD with the high price of the flanking $6.99 CDs.

Now what happened?

Everything bad. Fewer customers bid. Customers took longer to bid. Customers bid less often. Customers spend less money. Customers were scared.

Why? Because they were being asked to compare.

Here’s the bottom line of the experiment: When customers were invited to make a comparison, they were far less likely to respond favorably.

The outcome of asking customers to compare was devastating for CD sales.

The result was that prices of the adjacent CDs became statistically irrelevant to what was bid on the middle disc and the buyers in general became much more cautious and risk-adverse [sic].

You don’t want cautious buyers, but that’s exactly what an explicit comparison does. You don’t want risk-averse buyers, but that’s the consequences that a comparison chart can have.

Stanford researchers didn’t stop at eBay bids. They tested their newly discovered theories in other settings. In the next experiment, customers were asked to compare three cameras. Again, researchers noted risk-averse behavior, lower likelihood to spend more money, and the avoidance of high value products.

Researcher Simonson made this conclusion:

In this case, also, the very fact of being told to make the comparison made people much more risk-averse. Marketers need to be aware that comparative selling, although it can be very powerful, is not without its risks.

Risky business, eh? Yep. That’s what asking customers to compare does.

That’s what your piece-of-crap comparison chart is doing — it’s ruining your sales.

What does the customer think?

What is happening in the mind of the customer? Why do they turn against you when you whip out your snazzy comparison chart?

Here is what’s happening.

They know you’re biased.

You obviously want the customer to buy your product. Thus, your bias affects every aspect of the comparison chart.

Do you seriously think that a customer will look at this, and think. “Oh my gosh. This totally unbiased chart simply proves that the company who made the chart is better than anyone else in the world! I believe it! Yes I do!”

example of comparitive chart

You cherry-picked the selection criteria.

And there’s more.

Who made the chart? (You did.) So who got to pick the criteria? (You did.) So, is there any logical disconnect between the criteria selection and your company’s domination of all of those criteria?

You cherry picked the selection criteria

You cherry-picked the competitors.

And that’s not the only cherry-picking that’s going on. You also got to pick who you compared yourself with.

If you’re a Ford Taurus competing in the luxury feature market, you’re not going to do a side-by-side with a Bentley. It just doesn’t work that way.

You intentionally avoid negative aspects.

Obviously, if you create a comparison chart, you’re going to avoid things that make you look like a piece of junk.

The customer thinks of the competition.

Here’s a different type of bad side effect. I mentioned this above. Previously, the customer didn’t know about your competitor. Now they do.

You lose.

The customer distrusts you.

The net effect of a comparison chart is wholly unsavory. You lose the customer’s trust.

Part of the whole effort of e-commerce sales is gaining trust. That’s why you work hard to make a great website, write great copy, create awesome photos and deliver the best possible product.

You rip away all that trust the minute you pull out your comparison chart.

When does the competitive matrix work?

In spite of my overall aversion to CPMs, I can recognize their limited value in some limited contexts. Here are two:

When you are a neutral third party.

If you have nothing to gain from promoting a CPM, then by all means, use it. It is truly useful for comparing several companies. The format is clear, the advantages are obvious, and it quickly produces an outcome.

When you use it for internal purposes only.

One legitimate use of the competitive profile matrix is for internal purposes. For example, let’s say you want to see how you stack up with the competition.

Go ahead and create a CPM, then. As long as it’s not a public-facing marketing tool, you should be fine displaying it to your sales team or business leaders. It helps them understand where your company is strong, where you’re weak and what you need to do in order to improve.

Entrepreneur recommends using the matrix for such internal purposes: “The matrix can be shared with customers as a sales tool, or you can develop the matrix solely for in-house purposes to keep abreast of the competition.”


Bottom line recommendation from your ol’ pal Jeremy?

Put your crappy competitive chart away.




Jeremy Smith

Digital marketer with a penchant for dance; helping clients see the light through the jungle of tweets since before Twitter was cool.