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E-Marketing Performance Blog

Why Communicating What a Customer Is Losing Works

There’s an old adage that says “The pain of losing is twice as strong as the joy of winning.”

This principle can help your business if you use it wisely.  Even the threat of potential loss creates agitation in people that plays a powerful role in their decision making.  Psychologists call this the principle of scarcity.  It says that humans hold more appeal for things that they perceive will become less available in the future.  This is why you see scarce items get valued at ridiculous prices.  For example, a baseball card might be worth hundreds or thousands of dollars simply because there are not many of them in existence.  The same goes for cars.  The actual raw material value of the card or car is the same as any other with the same amount of raw materials used to create it.  But, the value of the item is not in it’s physical worth.  The value is in the possession of it.

Thoughts and Feelings of Loss are Powerful

Another way in which we value things is in the status of our possession of it.  If you don’t have a thing and you are surviving just fine, then it might be nice to have, but you can usually live without it.  But something happens once you have obtained possession of a thing.  You get used to having it and the luxury or convenience that it brings to your life.  It may even be important enough that you’ve adjusted your whole life around it.

Take the iPhone for example.  Before I had one, I survived just fine.  Obtaining one was a luxury and it was quite exciting at the time, but I didn’t need it.  But now that I have it, I don’t think I could live without it.  You see what’s going on there?  I actually can live without it just fine.  I just don’t THINK I could live without it because I’ve adjusted many of my daily habits based upon my possession of it.  On top of that, there are feelings associated with possessing it.  I think that if it was taken away from me, I would feel a sense of going backwards in life.  Losing it is more of a powerful motivator than when I just wanted one.

We React More to Losing Than Gaining

So, when the threat of potential loss is put upon us, we will fight for the preservation of that thing more aggressively than we would fight to obtain it when we don’t have it.  This is the reason that political revolutions usually occur after times of prosperity go in reverse.  At the time of the American Revolution, the colonists had the highest standard of living and the lowest taxes in the world.  It was when the British asked them to give up what they already had that they decided to revolt.  Or how about the most recent economic downturn.  Republicans really had no shot in ‘08 because they were the party under which things got worse, not because they were the party necessarily responsible.  No campaign slogan or good speech was going to soothe the people enough to win.



Communicate Potential Loss

So, when thinking about how to market your business, consider messages that communicate what customers will lose that they already have of value to them and you will likely see a much better response to the solution you possess that will enable them to avoid that loss.  For example, if I’m selling heavy duty iPhone cases, I might research and communicate messages about the loss of a person’s iPhone.  I might say “You will drop your iPhone 25 times in the next year.  If you don’t have this case, you’ll be 50% more likely to need a new one.”  I can guarantee that would be more effective on me than “Our iPhone cases are the best!”

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