“Losses loom larger than corresponding gains,” according to an economic theory first proposed by Amos Tversky and Daniel Kahneman in 1979. According to this theory, often called prospect theory, human beings derive much more displeasure from a loss than pleasure from a corresponding gain.
In other words, not only are we risk-averse, but we’d rather bet on a “sure thing” in order to make even a small return than take a shot at something with a higher payout yet far more risk.
Prospect theory is derived from another psychological phenomenon: negativity bias. According to work published by Baumeister and his colleagues, humans are much more likely to focus on and recall negative versus positive events. Also, Haizlip and her colleagues, learning occurs much more quickly when negative, not positive, reinforcement is used.
On an evolutionary scale, it makes sense that we as humans are prone to focusing more on bad versus good experiences- while the good stuff makes us feel good, the bad stuff could end up killing us. For our own survival and reproductive success, we have evolved to be so-called “Negative Nancies” and “Debbie Downers.” Better to be depressed than completely wiped from the gene pool.
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So, what does this mean for you as an affiliate marketer or as someone trying to sell products?
Marketers are told to focus on the benefits of a product rather than its features, and that’s a good start to showcasing a product. However, too many marketers stop at the benefits stage of marketing and proceed no further. Yet, according to human negativity bias, customers are more likely to purchase an affiliate or some other product if they are motivated by (possible) negative consequences.
Take for example the tactic often used by car mechanics while performing something as routine as an oil change. You’ll rarely hear about the benefits of your oil change or oil used- but you’ll hear plenty about the detriments of not replacing your air filter (lower gas mileage) or serpentine belt (engine failure). And those proposed dangers make you take notice more so than the benefit of a freshly oil changed car engine.
How do you take advantage of negativity?
Thus, you may wish to try titling your landing page with a question that focuses on some kind of irritant or negative consequence. Here are some examples:
To sell umbrella insurance policies: “This winter, are you prepared for a homeowner lawsuit?”
To sell computers: “Say goodbye to your clunky, slow laptop.”
To sell a work-at-home business opportunity: “Can’t put up with yet another ‘strategery’ meeting at work?”
Alternately, you might consider starting a Facebook or Twitter campaign where you invite readers to submit their favorite gripe about product X. After getting those negative- I mean creative- juices flowing, you could conveniently propose a solution to all those complaints: your product.
The grass is greener anywhere else
Oh Lord, won’t you buy me a Mercedes Benz?
My friends all drive Porsches, I must make amends.
So sings Janis Joplin in the song “Mercedes Benz.” What does this tune have to do with marketing?
Customers don’t always perceive that there is an issue with the product that they currently own- until a ‘new and improved’ product option comes along. When the iPhone first appeared on the market, everyone scrambled to but it- that is, until the iPhone 2 rolled out. Airlines used to sell the same seats for years and no one complained about being packed in like sardines- that is, until higher-priced business and first class seats were introduced.
Humans are notorious for looking over their shoulders and wondering what else is out there- whether that be a better job, product or even mate. We are always concerned that we are missing out on some new-fangled technology, luxury or life experience.
Having said that, consumers are also liable to the endowment effect, which is a fancy way of saying that consumers ascribe higher value to a product they already own compared to one that they don’t. Also, consumers will pay more money to maintain a currently owned product than to buy a completely new one- even for the same amount of money.
How can you use this information to your advantage?
If you have an affiliate product to peddle, consider offering differently priced grades from the same product line and comparing/contrasting their benefits. Most importantly of all, don’t just state that product X is better than product Y because of certain features. Rather, emphasize how many minutes of waiting time product X will shave off, or how much lighter the product is, or how much less money it costs to operate. In other words, emphasize reduced pain.
Alternately, if you are offering a service, create gradations of that service, as in “Good, Better, Best.” Emphasize all the issues that your best service plan solves compared with just the good or better service plan. Doing so can help you win over not only new customers, but current customers who subscribe to the good and better plans.
Don’t add to the negativity
There are several caveats to taking advantage of customer negativity, however. For starters, you don’t want to introduce any risks (i.e., negativity) to your own products. To that end, it is imperative that you offer a money-back guarantee if something should go awry. For some major product purchases, you may even need to provide a double-your-money-back guarantee.
Likewise, you should do your best to collect all possible objections and hesitations about your “new and improved” product or service and do your best to address them. Because customer testimonials are paramount to allaying fears, try to offer your product or service for free to several test subjects in exchange for an online review.
Finally, don’t offer your product or service as a “one size fits all” solution. Find the target audience for your solution item and even segment that audience (if needed). Discuss why your item is unique to their specific issues. This ensures your targeted audience that you’re not just out to make a buck to actually solve their problems.
Also, the exclusion you’ve “unintentionally” generated within the remaining audience will spark interest in, as well as create additional demand, from them for a product unique to their own pain points. This results in future product ideas and sales for you.