All is Not Lost

“Victory has a hundred fathers but defeat is an orphan.” – Galeazzo Ciano

I am not one to try to fool anyone into my way of thinking, or attempt to tap into others’ worst fears.  We’ve all experienced fear-based marketing, from the blaring commercial that ‘this deal won’t last long!’ to philanthropic appeals for donations that show starving children.

Why don’t commercials show me the benefits of having their product instead of assumed scarcity?  Why doesn’t that non-profit show me pictures of healthier children enjoying donated food?  Because as humans, we tend to have a really BIG aversion to loss. We’re afraid of missing out on a deal.  We’re afraid that the children will starve without our help.  We are more attuned to avoiding a loss than the joy we may get from seeing a gain or positive experience.  The people who ‘market’ to us know it.  It’s called Loss Aversion:  the tendency for people to strongly prefer avoiding losses over acquiring gains.

You Don’t Want That to Happen

According to all the studies I read on Loss Aversion, we are psychologically almost twice as likely to avoid a loss as to want to acquire or receive a gain.  That may explain so much of the fear-based marketing and alarmist newscasts we experience each day.  Does this theory apply to you at work?  Go check your calendar and note how many meetings have agendas that are forward-thinking, planning for the future and looking for gains.  Now count how many are set up to avoid loss, noting risk management, and reviewing what has happened in the past (to avoid more loss!).  If you’re lucky, you don’t have too many ‘loss aversion’ meetings.

Preservation Versus Loss

Loss Aversion is also why many government programs don’t get replaced or shut down.  With countless hours and millions of dollars invested, few want to end anything and be seen as wasting all that work.  Even when results aren’t meeting expectations, we invest more and more with no change in outcomes.  This can sometimes feel like being at a casino, losing $100 on a bet, and continuing to play to try to get back to even.  We know the odds are against us, yet we are conditioned to focus on that loss and try to rectify it.  What typically happens?  We lose even more.  The casinos know about loss aversion.  They just need you to make that first bet…

The End Justifying the Means:  All is Not Lost

Scott Burns, founder and CEO of GovDelivery.com, was a keynote speaker at the recent Government IT Symposium here in Saint Paul, Minnesota.  He discussed loss aversion and recommended framing our questions differently.  Instead of, “We need to take advantage of the new (thing) in order to improve how we (do something), he says try, “We are going to lose (something) if we don’t invest in (something).” Does that sound like fear-based marketing?  It does to me.  And it works.

If we want to get a continuous improvement project implemented, does it matter if we pitch to what leaders fear most, such as job losses or a shutdown of a program; instead of the benefits of being able to serve more people?   Fear of a loss is a powerful motivator.

You don’t want to miss out on having good results, do you?

P.S. For more details, type “loss aversion” into an Internet search engine and happy reading. This article here helps explain the theory, as does this one.

Joe Raasch is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.