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Loss Aversion Bias Triggers Buying Decisions

Fear is the strongest emotion that protects us. It can cripple us too. With fear, we avoid taking risks or losses. Even worse, We tend to exaggerate our chance of a loss and minimize our chance of a gain.

You’re offered a bet on a coin toss, heads or tails. If you call heads, you win $10. If you call tails, you lose $10. Are you willing to play this game?

Loss Aversion Bias Neuromarketing

Researchers have found that most people are not willing to play this game. The joy of winning $10 can’t compensate for the pain of losing $10. Most people are ONLY willing to play this game when the winning amount is raised to $25. The joy of winning $25 begins to compensate for the pain of losing $10. Loss aversion bias is our tendency to avoid possible negative outcomes.

Research shows that people absolutely hate losses, much more than they love gains.

The pain of loss or missing out can be a strong motivator for consumers to buy. This strong emotion affects the fast-thinking brain. This emotion dates back to the time of early humans. For them losing an opportunity could have meant life or death.

Consumers Hate Losses More Than They Love Gains

A good example of the loss aversion 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. However, only a limited stock is available. The limitations on stock and time activate people’s fear of losing a great deal.

Fear Missing Out Neuromarketing Sales

If you can convince potential customers that failing to act causes some sort of loss, they will make decisions faster. Consumers respond positively to marketing messages which help them avoid losses. There are several ways businesses can trigger the loss aversion bias to increase sales:

Don’t Miss Using Neuromarketing to Boost Sales

Activating the fear of losing out is just one way to trigger buying decisions. Neuromarketing offers multiple techniques that can work together to increase sales, leads and revenues as much as 500%. Drawing insights from Neuroscience, Social Psychology and Behavioral Economics, Neuromarketing gives your business incredible power of persuasion. Businesses that focus on just one concept at a time miss out on the synergy of Neuromarketing that is applied across the board.

Our Neuromarketing firm gives you the maximum benefit of an integrated approach. We understand how to provide the subtle, but powerful, influences. Contact us today to get started using our proven competition-busting marketing power.

Why Consumers Buy on Emotion – Why are our buying decisions shaped by unconscious emotions? Why are we motivated by the fear of missing out? The shopping frenzy seen during the Coronavirus crisis gives us a glimpse of why the brain buys.
How Amazon Applies Loss Aversion Bias to Convert – Amazon has perfected its Neuromarketing techniques to increase its conversion rates. It triggers a wide range of cognitive biases to motivate action.
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