As an E-commerce manager, it’s common knowledge that merely attracting the attention of your consumer isn’t enough. Consumers need to take action before we consider it success.
Action-oriented tactics include inciting curiosity, enhancing desire, or even challenging your consumers to take action (think reverse psychology).
Sure, marketing techniques that focus on inciting action have proven their effectiveness. They are a safe way to edge your consumers towards the final goal: check out and purchase!
It is far from a sure bet though. Curiosity stops at the level of viewing the product; desire can be overcome by price points; and some consumers simply do not take to reverse psychology. While we rack our brains for ways to influence action-taking by consumers, have you overlooked another important influence on behavior?
Now, what if I told you there’s a powerful motivating factor that not only encourages purchase — it can make purchase seem like the BEST COURSE OF ACTION?
First, let’s take a brief look at Prospect Theory and its the principle of loss aversion:
Imagine being offered $10, and imagine another scenario of losing $10. Loss aversion is the phenomenon where losses are psychologically more intense than gains, with the absolute value held constant.
Yes, reminding one of a potential loss is a compelling reason for action taking. Think of all the times you sprung up to actively avoid a loss. A sprint to the kitchen to salvage an almost burnt toast (potential loss) is somehow easier than leaving your comfy bed to make yourself toast in the first place (gain).
The same principle of loss aversion can be applied to consumer psychology. All you have to do is re-frame your marketing angle. Instead of “Purchase to gain a great toaster!” try “Don’t miss your last chance to own this great toaster!”
Here are a few concrete ways to use avoidance of loss in your E-commerce marketing strategies.
Use time-limited deals
Use countdowns and deadlines to create urgency – whether it be end of sale, end of a product release, or otherwise. Remind consumers of potentially missing the deals and losing out on a good bargain.
Exclusive or Limited Edition Products
One important emotion involved in loss aversion is regret. First, create desire by introducing your product’s USP. Next, highlight its exclusivity or availability (if applicable) to project potential loss of ownership. The anticipated regret of not owning a desired product would be amplified, thus encouraging purchase to avoid regret.
Framing product benefits in a loss than gain scenario
As opposed to “This product will give you clear skin”, go with “Keep your skin clear with our product”. Describing fundamentally the same benefit, this re-framing reminds consumers of the potential loss of not using your product (losing clear skin).
Introduce anxiety about current situation
Being careful not to overdo or exaggerate this tactic, suggest some ways in which your consumer may be dissatisfied. Going by the above skincare product example, caution that with age, our skin will not retain its vitality. Then, describe how the potential loss can be avoided with marketed product.
In short, avoidance of loss can be a powerful motivator of behavior. Re-frame your marketing strategies to influence consumer action – but use it sparingly! Remember that at the end of the day, consumers want to have an overall positive experience on your E-commerce site. This predicts whether they would become a returning customer.