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Loss Aversion

What is it?

Loss aversion is the term used to describe a psychological phenomenon common among humans around the globe. It has been found that we, as humans, prioritize avoiding losses over acquiring gains. Marketing strategists know this and use it to influence consumer behavior.


The “save $5” voucher performs better than the “gain $5” voucher.

Image Source
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App developers found that allowing for customization increased retention rates. Image Source

Another way that smart marketers leverage aversion to loss, is by instilling a sense of ownership into prospective buyers as early in the buying process as possible.

  1. Think about shopping experiences that allow you to customize a product or profile, or “try before you buy”?
  2. Think about services that require you apply to see if you are a match before you can speak with a member of their sales team.

Customization of a product, digital space, list or profile gives people a sense of ownership that leads to higher conversion rates & retention rates.

Take action

Adjust one of the aforementioned examples to fit into your sales funnel or onboarding process.

If none of the examples stand out to you, consider Loss Aversion’s cousin FOMO.

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