BRX Pro Tip: Loss Aversion
Stone Payton: [00:00:00] Welcome back to Business RadioX Pro Tips. Lee Kantor and Stone Payton here with you. Lee, let’s talk a little bit about framing up a strategy, an offering, a suite of services, a recommendation summary. One of the things we have to take into account is just naturally occurring in virtually any process that involves change. We got to be thinking about loss aversion.
Lee Kantor: [00:00:25] Yeah. Loss aversion is definitely an important consideration to remember when it comes to human behavior and persuasion. Because humans are not the rational decision makers we think they are. For most people, a loss hurts them way more than the same size gain gives them pleasure. And so, this comes into play when you’re framing your offer. Free trials gives a consumer a chance to try something and benefit from the service. Then, if they don’t buy, you take it away from them. So, a prelaunch bonus is another way to create some sort of loss aversion to people already familiar with your stuff. And this gives them a chance to get in early with some extras, but it’s taken away if they don’t buy.
Lee Kantor: [00:01:10] So, when people have something and then it’s taken away, they don’t like that. So, it’s much better to give them that kind of lever in order to help them make a decision. And that’ll be a more persuasive way of kind of making an offer to somebody when there is a chance that they could lose whatever it is the thing that they have right now and that they like it. If you can take it away, then that will force them to make a decision.
