Quantitative Decisionmaking–Get a Better Deal

There are only a few people who enjoy the process of evaluating and buying a used car. One of them is the salesperson. The customers rarely have the same satisfaction—there is always this nagging doubt that there is some information missing or obscured that will lead to buying the wrong car at the wrong price. No wonder that internet sales of automobiles are growing rapidly. It is psychologically easier to be outwitted impersonally than by the person negotiating from the other side of the desk.

Buying a car is an example of a quantitative decision process. The steps are information, presentation, evaluation, and decision.

In the example of the car, the decision process requires information available about the condition and price of the vehicle, presentation of the information by the salesperson, evaluation of these facts by the buyer, and finally a clear decision on purchasing the car. There are many other examples of quantitative decisions at both home and on the job. For example, actions based on sales or marketing information, investment decisions, negotiations with contractors, property purchases all require quantitative decisions. Each example has the same steps.

The good news is that you can improve your chances of making a better decision and enjoying a more satisfying result. The four questions below can more effectively guide the decision process.

Four Guiding Questions:

Is ALL of the relevant information available?

The information presentation is fully shaped by someone else. Consequently, there may be either conscious or unconscious bias. It is possible that information has been selectively chosen. There may be good reasons to exclude it, but you, as the evaluator, must assert the opportunity to have access to it.

Does the information presented support the conclusions?

In other words, is there a cause and effect relationship between the information and product? In the case of a used car, an independent mechanics evaluation may be linked to the condition of the automobile. A salesman’s assertion that the car is in good condition may not necessarily be linked to the car’s condition. A mechanics log has a stronger relationship to the condition of the engine than the overall mileage.

When you examine the relationship between the information and the conclusion, it is surprising the amount of information that has no bearing on the decision. Disregard this superfluous information from the decision process.

What do you really need to know?

The best approach is to formulate your own answers to this question even before the meeting. Then, you have an idea of the type of information you consider essential and can compare it with the facts given at the meeting. This exercise gives far more control to the person making the decision. You have a basis to both evaluate the information and ask specific follow-up questions that really help to evaluate and supplement the presented information.

Are you riding the flow of the presentation rather than the content?

The quality of the presentation may be completely different from the quality of the content. However, the style or charisma of the presenter may be intoxicating so that the content evaluation does not happen. (Obviously many politicians and others can make a good living from this skill.) Your responsibility is different.

Find a way to put distance from the presentation itself—either by clearing your mind, leaving the physical space (this is particularly clear in the example of being in the small car sales office), or removing the time pressure element for an immediate decision. This distance separates the style from the content.

That’s it. 4 questions to keep in mind. Try them and see if you can improve your chances of a good outcome the next time a quantitative decision comes along.

Advertisements

2 Responses to Quantitative Decisionmaking–Get a Better Deal

  1. Jim says:

    Great Blog. I agree with the above and all there is to say really. Cheers for the read. Nice looking as well. Happy New Year
    J

  2. jambomb says:

    is it ok if i post here?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: