Introducing the nudge: Loss Aversion

‘Nudge’ is one of the words that behavioural scientists love to throw around. So much so that several governments now have their own ‘nudge units’ (groups of advisors on behaviour change).


So what exactly is a nudge? We like to think of it as any marketing action built around one of the short-cuts people use in everyday decision making. Behavioural science has identified well over a hundred of these short-cuts, so it can get all very messy very quickly. Today, however, we will introduce you to just one – Loss Aversion.


Simply put, Loss Aversion is the idea that "losses loom larger than gains." Losing $10 is more compelling than the idea of winning $10. Some research (Kahneman 2011) suggests that losses hurt about twice as much as gains make us happy. 


The neuroscience basis for this nudge lies deep within your brain where the idea of loss is processed, in the bits of the brain normally associated with emotion: the insula and the amygdala. 


It is a simple idea, that can be used in marketing in a wide variety of ways. For example, you can try and create a sense of ownership; "Try for 30 days and send back if not happy." Alternatively, you can communicate what customers stand to lose by not using your product or service. 



  • A headline in an EDM does not have to just talk about what is in the email, but it can directly address what the recipient stands to lose by not reading your email.

  • Customers, clinicians, and patients care about many things over and above your product or service (they are just human after all!).  You don't have to focus exclusively on what an individual stands to gain by using your product or service; you can also talk about what a person stands to lose by not using your product or service including the financial, emotional, or social consequences.

  • Instead of giving rewards for customers in a loyalty program, think about how to express an incentive in terms of what they lost. For example, give them a notional reward at the beginning and discount this when they begin to slack.

  • Programs directed at patient concordance do not only have to focus on better health outcomes. You can also talk to what a patient stands to lose through ill-health. This could be financial, quality of life, and relationships.

BlogAndrew DeLeeuwComment