Yes, you read that right. In some cases, one $100 bill is worth more than another.
It happens when you lose that $100. Then it’s worth more than the $100 you gained.
This cognitive bias is called loss aversion and it’s defined as:
The disutility of giving up an object is greater than the utility associated with acquiring it.
Loss aversion is used all the time in sales and marketing messages. Here are some you might have seen before:
- Act now before it’s too late!
- Black Friday sales
- Stop wasting money!
- Stop wasting time!
- Stop wasting (anything)!
These messages seem cheesy and overplayed out of context, but they work. The reason is simple: the psychological impact of a loss is far greater than that of a gain.
As a professional service provider, there are genuine times when you can help clients avoid losses. Some businesses are based exclusively on loss avoidance. Think about Norton Antivirus, or backup services, or most insurance policies.
Loss avoidance can be a powerful tool to illustrate the impact of what you do. Here are some ways it might apply to you in your sales and marketing messages:
- Don’t lose out to competitor X
- If you move too slowly you’ll lose the race
- User acquisition demands action now (NOTE: this is also urgency)
The point is, there’s a lot your clients may be losing right now. Insofar as those losses are legitimate, you should help them understand what they are and how to avoid them.
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