If you watched the waning minutes of yesterday’s World Cup match between the USA and Portugal, you felt the bitter sting, the visceral agony of the USA allowing a goal with mere seconds left in stoppage time. A squandered opportunity to escape the “Group of Death” and move on in the competition.
Or as some have said, “The U.S. lost 2-2 to Portugal.”
More than a testimony to the power of sport to engage our hearts and souls, the sense of dismay yesterday was excruciating due to the fact that the USA lost a lead. The draw felt like a loss. Had a pitched battle with a 2-2 score been reached sometime earlier in the match, the sense of loss would not be nearly so acute. In fact it might have even been viewed as a positive step to advance out of Group G.
The pain that USA soccer fans felt yesterday is a phenomenon that economists call loss aversion. It’s the powerful—albeit less than rational—reality that we are all wired to perceive losses more distinctly and emotionally than wins. Think for example how you would feel if you found a $100 bill on the sidewalk. Pretty happy, right? But what if you realized that somehow you had lost a $100 bill while walking down that same sidewalk? Most people would rate the emotional quotient of losing $100 as far greater in magnitude than the joy of unexpectedly finding $100.
Loss aversion is what causes investors to chase bad investments with more money and gamblers to double down after taking a loss. Billions of dollars a year are spent (lost?) on such reactions to loss aversion.
For marketers seeking to connect with their audiences, painting a picture of the upside of a new product, service or experience is good. But creating awareness of the potential losses if they are not embraced can be even more powerful. While not recommending a cynical play on the less-than-rational emotions of an audience, it is worth taking time in one’s pitch to show the audience the high cost of missing out on the opportunity being offered. This of course assumes an organization has something really tremendous to sell, and is targeting an audience that would really benefit from it.
Loss aversion is just one more reminder that we are not Mr. Spock-like rationalists. A lesson to marketers that a heart full of feeling almost always trumps a head full of facts.