Do Loss Aversion marketing tactics work? - Market Research & Behaviour analytics

Do Loss Aversion marketing tactics work?

ByHimanshu Vashishtha

Do Loss Aversion marketing tactics work?

Loss aversion is a powerful psychological tactic utilized by marketers to amplify marketing efforts and increase sales conversions. It refers to people’s tendency to choose avoiding losses over acquiring gains. In fact studies show that negative impacts like losses, disadvantages etc. affect people more than gains, advantages etc.

And by nature, humans tend to lean towards avoiding losses. And just an idea of losing something creates strong reactions in people. Loss aversion is an effective motivator of consumer behaviour.

How is loss aversion used in marketing?

    • To create sense of urgency

Marketers, to create a sense of urgency in target consumer segments, use loss aversion tactic liberally. Phrases like “Flash sale!”, “Only till stocks last”, “Don’t miss out” etc. are used to create urgency in consumer minds, because it taps into people’s desire for avoiding loss.

Here’s how you can utilize it –

  • Include a time frame for your offer. This will push customers to purchase before the lower price offer goes off.
  • Mention if it’s limited stock. Customers will want to purchase immediately if they know it could become unavailable soon.
  • Include countdown timers and notifications about stock so that these visual reminders prompt customers to purchase before stock or time ends.


    • To retain customers

People tend to stick to what they are comfortable with unless something happens to make them switch. Loss aversion is like a general bias in humans, which makes them resistant to change. When they think of change they focus more on what they would lose than what they would get.

Here’s how you can utilize it –

  • Amp up your customer service and experience so that people don’t have a reason to leave.
  • Offer loyalty programs where they accumulate points, rewards etc. so that people feel inclined to stay.
  • Keep reminding customers, in creative and non-intrusive ways, how your products can solve problems in their lives.


    • To create ownership effect

People aim for owning things and work towards getting those. And once they have those with them, they want to hold on to them. Marketers work to tap into this characteristic of consumers by making them feel like they own the product, to increase the chances of purchase. They make them feel that if they don’t they would lose out on it.

Here’s how you can utilize it –

  • Include marketing copy that are suggestive of your target consumers already owning the product.
  • Display testimonials and pictures of people already using your product satisfactorily and happily.
  • Show video testimonials of people using your products.
  • Offer free samples or trials so that people can use your products without any risk for them.

Loss aversion tactics are definitely very powerful marketing tools. It is best to devise the ones that work best for you and incorporate them in your marketing strategy.

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