Episode 9 of The Brainy Business podcast (which came out today) was the first Behavioral Economics Foundations episode, and it was dedicated to Loss Aversion.
In it, after a list of GOOD examples for loss aversion (including those for real estate agents, financial institutions, accountants, business coaches, wedding retailers, and more) I give an example of a very ridiculous pop up that came up on a website trying to sell an online product.
Loss Aversion Taken Too Far
This is an example of taking loss aversion too far, where you might inadvertently trigger the conscious brain to be flagged for the wrong reasons, and talk your potential customer right out of a sale.
It actually does a lot of things right, including the use of color (red = bad, green = good) and scratching out the old price, but they would have benefitted even more from the “good” price being in a smaller font (check out my free ebook, The 10 Behavioral Economics Concepts You Need To Know (And How To Apply Them) for more details on why)
While I read the options on air, there is really something added when you can see it with your eyes (remember those 11 million bits per second of subconscious processing power!) so here it is:
What do you think? Pretty extreme, huh?
Loss aversion works because it triggers your subconscious brain’s natural tendency to not want to let go of things. It can flag your conscious brain for good (click that yellow button!) or bad (I don’t have a rule for this, please read more closely and analyze). In this case, flagging the conscious brain to read closer would likely work against the advertiser (especially when nothing had been purchased yet…they could abandon the whole thing!) Your lesson? Don’t go too extreme with any of the concepts, as they can easily be too much and deter instead of triggering the subconscious.
Do you have an example of loss aversion in action (both bad and good)? Please share it in the comments, or come on over to the Facebook page and join the conversation. See you there!