Why you are already losing out to your competitors

Loss aversion 2According to the principle of loss aversion, losses often loom larger than gains. In other words, we generally prefer avoiding losses to acquiring gains. This also means that we often value an item more highly when asked to give it up than when we first acquired it.

In the 1970s, behavioural economists Kahneman and Tversky conducted a series of studies to scientifically prove that we really are more averse to losses than we are motivated by gains. Some studies even suggest that losses are twice as powerful, psychologically, as gains. This implies that a person who loses $100 will lose more satisfaction than another will gain from a $100 windfall.

It is easy to see how this principle can be true when thinking back to your own experiences as a consumer.  For example, which of the following would motivate you the most: receiving a £5 discount or avoiding a £5 surcharge? Most of us would do a lot to avoid the surcharge while a £5 discount would be seen as a welcome, but small, reduction in price.

So how does loss aversion impact how you should sell your B2B products and services to clients? When persuading a client to make a purchase, it's easy to position what you are offering as something that will help them avoid a loss (a loss of customers, a loss of market share, a loss of share of voice in their target media). While your clients will want to improve their sales, they are even more concerned with losing business.

As a demonstration, the following is a list of services TopLine offers and how they can be sold using the loss aversion principle:

Public relations

Not pursuing a public relations strategy means that for every journalist request for a spokesperson you don’t fill, you could be losing an easy opportunity to increase your share of voice in your target media.


For every day you put off implementing an SEO strategy, you lose an opportunity to gain ground on your search competitors and allow them time to build up their domain authority, making it more and more difficult for you to ever catch up.

Crisis communications

Most companies do not start thinking about putting a crisis communications plan in place until it is too late. You shouldn’t wait to starting thinking about crisis communications until the outcome of a crisis has already resulted in the loss of your company’s reputation.

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