If marketing has an equivalent to ‘location, location, location’, it’s ‘benefits, benefits, benefits.’ Products and services must offer them in abundance. And woe to the advertiser who leaves them out of the picture. Shoppers must profit, or no deal. Gleaming teeth, jackrabbit energy, sparkling linoleum. The tangible gain is all. Nobody buys without it. But is gain the ultimate motivator?
Psychologists respond with a resounding ‘no’. Something deeper electrifies the consumer. And it does so more frequently and effectively. That something is ‘loss-aversion’.
Loss-aversion is a psychological phenomenon, dredging up primal impulses. Fear of loss not love of gain is the ruling force. It shouts, ‘take action or you’ll miss something extraordinary.’ Forever gone will be the once-in-a-millennium opportunity.
Through the years, marketers have capitalized on loss-aversion. When this circuit is tripped, virtually all products and services benefit. When does a brand marketer implement it, and for what? That depends on multiple factors, including product or service, target customer, medium utilized, and even time of year. Research and legwork will reveal the answers.
The loss-aversion impulse has many triggers. A leading favorite is the limitation principle. Example — “Sale price good until such and such a date.” For the undecided or moderately interested, the time squeeze is like rocket fuel. Off they go, because — who wants to miss a rare opportunity?
The limitation principle also applies to supply. We’ve all been issued the stern warning – “Hurry, while supplies last!” Or some variant thereof. For many, looming loss is unbearable. Decisive action is the only option. Black Friday shopping frenzies bring this out in full force.
Brand marketers can provide additional nudging with well-placed reminders. Websites and landing pages are great spots for motivational graphics. Real-time animated clocks, calendars, and supply charts are among the popular choices. What they all say is “get going.” And shoppers often do.
If you have questions or comments about loss-aversion strategies in marketing campaigns, or about any other brand-related topic, feel free to send them our way.