Exploiting and Avoiding the Fear of Loss

This video from a TED Talk by Laurie Santos is genius – it talks about one of the linchpins of high-pressure sales: Loss Aversion.


In a nutshell – “People’s intuitions about how much risk to take varies depending on where they started with.”

I really found it interesting to learn that loss aversion is relative to the starting point of the game. The game being the point at which you have to start deciding.

Yes, we all know people want to minimize loss, and we do know people want to minimize loss in disproportion (much more) to how much they want to achieve gains. What this presentation added was two things:

  1. The knowledge that this drive cannot be easily overcome
  2. The knowledge that the most effective strategy would be to give you something you have to spend – with the choices for spending being either safely lose a certain amount or in a risky no-loss/multiple-loss fashion.

This is exactly what happens to, among tons of cases Laurie mentions, homeowners whose homes have depreciated below the purchase value: They are most likely to take the no-loss gamble and hold on to the shack instead of the known loss and cut their losses short.

Can you use this knowledge in your daily marketing? Well, how much more explicit can this get?

Interesting thought: Do you make these same mistakes when running your Internet Marketing campaigns? Do you take unwarranted risks in attempts to prevent a loss?

I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear.
I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing.
Only I will remain.
Bene Gesserit Litany Against Fear