In Order to Get Consumers to Change, Marketers Have to Understand What They're Giving Up

Losing something hurts. It hurts a lot. Whether you lose a sports game, a person, or an object that you like; losing hurts twice as much as it feels good to gain something. We know this from the concept, loss aversion, which is from "Prospect Theory" by Daniel Kahneman and Amos Tversky. Psychologically, we are much more hit by a loss than a gain, which explains why we are much more likely to talk about a negative consumer experience than a positive one. Loss and negativity stick with us. 

Psychology and marketing are very related; they are not quite twins but more likely brother & sister… or at least cousins. So much about marketing and advertising are guided about how we know people think, feel, and act around certain situations and ideas. Prospect Theory, among other psychology theories, have brought more knowledge and insight to the heart of marketing than many approaches.

Where psychology and marketing/advertising meet is very fertile soil for creative agencies. Within this ground, we can see how Prospect Theory, especially loss aversion, will influence the way people act and the choices they make. This powerful notion is what drives people to have an interest in maintaining and knowing the current state of affairs, a.k.a. status quo bias.

As a marketing agency and advertising agency creative, it is routine to ask people to make a choice. Choices, by definition, mean gaining something and losing something. For a consumer making a choice they have made many times in the past, the gain outweighs the loss, or at least they are ignorant to the loss. However, when we are asking consumers to choose a product or service over a product or service they have preferred to buy in the past, the loss is much greater. People don't like loss; this is part of the reason why brand loyalists exist. There is less loss.

Producing behavioral change in consumers can be an uphill battle. Marketers take the route that explains how a product or service will benefit lives via its cool features, new tech, or how it's different than the competition. Too many marketers fail to consider what the consumer stands to lose if they change their current purchasing behaviors.

To be more successful at engineering behavioral changes in consumers, our Chicago creative marketing agency analyzes both sides of the issue. If your business wants more ROI for its marketing, then call or email Integraphix.