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People don’t like to lose.<\/p>\n
Whether it’s losing a game, an argument, or an item we want to buy, we don’t like it.<\/p>\n
In fact, people make buying decisions that are motivated by their desire to avoid a loss.<\/p>\n
Savvy marketers know this. In fact, loss aversion is one of the key principles of marketing psychology<\/a>.<\/p>\n They keep loss aversion in mind as they plan their campaigns and write their copy.<\/p>\n Here’s what you need to know about loss aversion and 10 proven loss aversion marketing tactics that can help amplify your marketing efforts<\/a>.<\/p>\n Loss aversion refers to the tendency of people to strongly prefer avoiding losses to acquiring gains. Studies show that loss aversion is twice as powerful psychologically as the acquisition of something.<\/p>\n Psychologists Daniel Kahneman and Amos Tversky\u00a0(you might remember them from our article on\u00a0marketing and the anchoring effect<\/a>) studied the impact of loss on human decision-making and were able to confirm their central assumption<\/a> that:<\/p>\n …losses and disadvantages have greater impact on preferences than gains and advantages.<\/p><\/blockquote>\n Humans are hard-wired to avoid losses. And, in the years since Tversky and Kahneman first developed their behavioral theory based on loss aversion, science has proven this to be true.\u00a0Stanford University psychology professor Russell A. Poldrack explains<\/a>:<\/p>\n …psychologists and neuroscientists have uncovered how loss aversion may work on a neural level. In 2007 my colleagues and I found that the brain regions that process value and reward may be silenced more when we evaluate a potential loss than they are activated when we assess a similar-sized gain.<\/p><\/blockquote>\n Poldrack goes on to say,<\/p>\n Perhaps most interesting, the reactions in our subjects’ brains were stronger in response to possible<\/em> losses than to gains\u2014a phenomenon we dubbed neural loss aversion.<\/p><\/blockquote>\n Just the idea<\/em> of a loss is enough to create a strong reaction. There’s no question that loss aversion is a powerful motivator in all aspects of life – including consumer behavior<\/a>.<\/p>\n You’re familiar with loss aversion marketing tactics whether you realize it or not.<\/p>\n They’re everywhere<\/em>.<\/p>\n “Only 3 left in stock! Order now!”<\/p>\n “Available while supplies last.”<\/p>\n “Flash Sale! Today Only!”<\/p>\n “Don’t miss out on this awesome deal!”<\/p>\n We are invited, pressured, and cajoled to purchase using the fear of loss every single day. These hard-sell pressure tactics create what marketers call “urgency.”<\/p>\n And, while these urgency tactics may sometimes be obnoxious, they work.<\/p>\n Just this morning I was shopping for a small shelf to go above my headboard. I wasn’t planning to buy one, but I found a shelf that I liked and noticed that it said, “Only one left in stock” in small red script under the picture.<\/p>\n Before I knew it, I ordered the shelf.<\/p>\n Urgency plays directly to our desire to avoid loss. I didn’t want to miss out on that shelf. So, my lizard brain took over and clicked “Add to Cart,” ensuring that I wouldn’t “lose” what I’d found. Even though I’d never really had it to begin with.<\/p>\nWhat is loss aversion?<\/h2>\n
Loss Aversion and Urgency<\/h2>\n
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