Loss Aversion Bias Triggers Buying Decisions
- Why are your potential customers so slow in making decisions?
- What makes them take actions fast?
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?

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.
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.

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:
- 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.” Such messages speak directly to the unconscious 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 uses this loss aversion trigger constantly. It displays the number of units available in stock prominently. Messages like “Only 3 Left in Stock,” are 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 higher conversion. The impact is increased if there is a deadline to get the free item.The same time limitation 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.
- Demonstrate How Your Offer Prevents Losses – “Don’t Waste $1,000 a Year on Energy Bills!” This message is stronger than “Get $1,000 Extra Savings a Year on Energy Bills!” Loss looms larger than gain. This is how we perceive a loss against a gain.Messages showing how a new, high-efficiency furnace saves money on energy bills are effective. Similarly, showing significant fuel cost savings for an economical car can be the sales trigger. Focus on actual dollar savings over time for maximum impact on the emotional brain.
- 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 promoting sales, 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 a quick decision.“Did You Forget to Buy a Case?” can be a cue to add an additional item.
- 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 $1,000!” is more powerful than “Act now to save $1,000!”“Only 15 of These HDTVs are Available at This Low Price!” is more effective than “Shop Early for the Best Savings!”
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.