Loss Aversion Bias
Why do so many website visitors leave without buying or making contact? How can you use neuromarketing to convert more guests? One proven, time-tested strategy is to create a situation where failing to act causes some sort of loss. Research shows that people react to losing something, time and time again. They also respond positively to marketing efforts which help them avoid losses in the future. This fear of missing out affects the fast-thinking emotional part of the brain, and dates back to the time of early humans. For them losing an opportunity was a life or death situation.
A good example of exploiting the loss aversion cognitive bias is the Black Friday phenomenon. Retailers put highly sought-after merchandise on deep discount for a couple of days after Thanksgiving. Typically, they select a few very popular items and cut prices drastically to attract customers. They add to the effect by offering only a limited stock of these attractive bargains and providing only a brief time for the sale. Those limitations activate people’s fear of losing an opportunity for huge savings and pack the stores with eager customers. Once there, they’re very likely to shop for other items.
There are several ways internet businesses can trigger the loss aversion bias to increase sales:
- Time Limitations Can Trigger Action – Offering a significant discount for only a brief period is a classic use of the loss aversion bias. “Save 40% if You Order This Week!” “This Offer Expires Today.” Messages like those speak directly to the unconscious part of the brain and can trigger an immediate decision. There are endless variations on this theme you can use to stimulate the fear of losing an opportunity.
- Limited Availability Is Another Effective Tool – Amazon, the leader in internet retailing, uses this loss aversion tool constantly. It displays the number of units available in stock prominently on point of sale pages. Message like “Only 3 Left in Stock,” is a strong motivator for clicking the Add to Cart button. A message showing how many people are currently looking at an item can create a competitive rush to buy, as well.
- Temporary Free Add-Ons Also Boost Sales – Free bonus items are a proven enticement for consumer action and conversion. The impact of these is increased if there is a deadline in place to get the free item. The same time limitation features can make other attractive offers, like rebates, more powerful. By triggering the fast-acting brain’s fear of missing an opportunity, you’ll boost sales over just presenting the offer.
- Demonstrate How Your Offer Prevents Losses – “Don’t Waste $1000 a Year on Energy Bills!” Content that shows how a new, high-efficiency furnace saves money on energy bills is effective content for a heating and AC company. Similarly, showing significant fuel cost savings for an economical car model can be the sales trigger. Focus on actual dollar savings over time for maximum impact on the emotional parts of the brain. Larger numbers work better.
- Use Free Trial Periods to Counter Fears – Fear of losses through dissatisfaction can stall consumers’ action. But, once a good product is in the customer’s hands, the fear of losing it strongly inhibits returns. That’s why free trial periods are so effective. Once the purchase is made, few will return it. Cosmetic products are an excellent example. Most offer a free trial period, but actual returns are rare.
- Don’t Miss Loss Aversion Sales Opportunities – When creating internet sales content and pages, keep an eye open for ways to stimulate the fear of losing out. For example, around holidays, you can use possible shipping delays to trigger an immediate purchase. “Don’t Risk Late Delivery” is a good technique for triggering an immediate decision. “Did You Forget to Buy a Case?” can be a cue to add an additional item, which should be display simultaneously.
- Frame Your Content to Focus on Loss Prevention – Neuroscience research shows that activating the fear of losing is more powerful than focusing on savings. Use language that highlights the potential loss. “Don’t miss your chance to save $1000!” is more powerful than “Act now to save $1000!” “Only 15 of These HDTVs are Available at This Low Price!” is more effective than “Shop Early for the Best Savings!” Consider your content carefully.
Don’t Miss Using Cognitive Biases to Increase Sales
Activating the fear of losing out is just one way to trigger action for your internet marketing. Neuromarketing offers multiple techniques that can work together to increase sales, leads and revenues as much as 500%. Every brain-aware strategy you employ should work to amplify the effect of other methods. Businesses that focus on just one concept at a time miss out on the synergy of Neuromarketing that is applied across the board. When you work with a leading neuroscience-based marketing company like ours, you get the maximum benefit of an integrated approach. We understand how to provide the subtle, but powerful, influences that produce the results you need. Contact us today to get started using our proven competition-busting marketing power.