Have you mislaid some cash or something really important recently? Did you think you had lost it? Do you remember how hard you tried to retrieve it?
That feeling is called ‘Loss Aversion’
In this Vlog, Grant explains how Loss Aversion can help you when selling.
What would you do for £20?
Would you stay behind after work for a couple of hours?
Would you go to a friend’s and help them cook dinner?
And yet consider this… You’re sitting on your couch at home and you put your hand in your pocket – where you know there’s a £20 note – and suddenly it’s not there. You pick up all the cushions, you look under the seat, you even go out to the car and see if it was there.
You’ll expound enormous amounts of energy to try and find the £20 that you’ve now lost. And even when you’ve given up, three days later – somewhere in the back of your mind – you’re still be quite frustrated that you lost that £20.
But what we’re saying is this; people will exert a lot more energy to not lose out, than they will to gain something. And we call this loss aversion.
The reason why this is important is in business people often want to be very positive. They want to tell their customers and prospects all the benefits they can give them. All the things they’re going to gain by using their products or services. And this isn’t necessarily the most powerful way to communicate your offering.
Let me give you an example. I could tell you to use my marketing solutions and gain a lot more customers.
Or I could say; by not marketing effectively, how many customers are you currently missing out on?
For many people, that second message is a lot more powerful than the first. It’s not really about being positive or negative. It’s about being effective.
And tapping into loss version can be a really, really good way of communicating your offering.
And finally… hang on a minute. There’s a place I didn’t check for that £20.
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