Before you scream ‘Jamie this is all old hat stuff’, have you ever considered the why? Let’s look at the old sales tropes like ‘Don’t miss out’,’Last chance to buy’, ‘last in stock’. They won’t die because they work.
My dad always taught me that there are two great motivators of people.
- Fear of loss
- Hope of gain
It’s called the Loss Aversion theory. Which is a concept from behavioral economics and psychology that explains how people tend to prefer avoiding losses over acquiring equivalent gains. The simplest example is a question to you dear reader:
Would you prefer the joy of finding a hundred-dollar bill on the street, or would you prefer to avoid the pain of losing a hundred-dollar bill?
Intrinsically we can measure the cost of loss, my immediate thinking is ‘crap, I lost a hundred bucks? Now I’ll need to go to the bank, and I was going to buy a Big Mac with that, and that cool new art pencil I wanted, and I could have used that for that T-shirt, or…’’.
This means that people will make irrational decisions when faced with loss, so don’t use it to sell people a dead dog.
Example 1
When you are negotiating, saying, “This has 40% more vitamin C” is positive framing and it highlights a benefit.
Far stronger is the Loss-focused framing: “A lack of vitamin C is what caused sailors to suffer from scurvy.”
Example 2
Positive framing: “This investment could grow your wealth by 10% annually.”
Loss-focused framing: “Not investing now could mean missing out on $10,000 in compounded growth over the next five years.”
Example 3
Positive framing: “Our course will help you build new skills.”
Loss-focused framing: “Without these skills, you risk falling behind competitors who are already using these tools to succeed.”
