Psychology in Sales – Study #4

Study #4 – Losses Loom Larger Than Gains

The sad truth about people is this:

People will fight harder to prevent losing a dollar than earning a dollar (this is known as loss aversion).

From a logical standpoint, it makes no sense.

A dollar is a dollar is a dollar.

But when it comes to human beings, we’re not that logical. We’re quite emotional, actually.

And when it comes to a dollar, a dollar that’s ours is more valuable than earning a dollar that isn’t ours.

That’s why when people sell their houses they often overvalue their house. After all, it’s THEIR house.

People respond better to telling them what they’re missing out on over telling them what benefits they stand to gain… because loss looms larger than gains.

So, not only do you need to tell people what they’ll get when they buy whatever it is you’re selling, you also need to reiterate what they’ll lose out on if they don’t buy… for maximum impact.

Caution: Just because losses loom larger than gains, doesn’t mean you should focus only on loss. That’s a scarce mindset. You should intersperse both gains AND losses in your sales copy. Explain what people stand to gain… and what they stand to lose… for best results.

Happy Tuesday & Happy Selling!
Kevin