Is This A Chance Of Gain Or A Way Of Avoiding Loss? Whichever Works
“When you try to sell someone something – a product, a service, an idea – do you stop to think whether they are trying to avoid loss or enjoy a gain? If not, you definitely should. It’s the most important thing to understand. But what, you ask, if my offering offers a gain and they are looking to avoid a loss? Don’t worry. Any offering can be presented in either way. I’ll explain how. But first let’s look at the science of loss aversion and gain seeking.
A study asked a group of people to imagine they were Minister of Health, and that their scientific advisors told them that an epidemic was coming. If they did nothing, 600 people would die. There were two options. Option A would certainly save 200. Option B had a one third chance of saving 600 and an two third chance of saving no-one. Option A, the sure thing, received a strong majority. A different group had the same options presented to them in a different way. The choice was option A, 400 people die or option B with a one third chance of nobody dying and a two third chance of all 600 dying. It’s exactly the same set of options, but now the gamble got more votes.
The conclusion is: when faced with gain, people become risk-averse. They want to lock in a small gain, not take a risk for a bigger one. When faced with loss, on the other hand, they become risk-seeking. They will take a risk to avoid the worst.
This explains lots of things. It explains many of my failed consultancy sales, where I was trying to sell benefits and a wonderful future but they were thinking about how to avoid loss. It explains why IBM did so well out of the ‘nobody got fired for buying IBM’ idea.
So sellers beware; you are naturally thinking about the wonderful results that will flow from your prospect buying your thing. But that won’t move them nearly as much as the idea of avoiding loss.
The good news is that just about anything can be presented either way. …”