Human beings have two major motivations; to gain reward and to avoid loss. We may go out to eat to gain reward. We buy insurance solely to avoid loss. These motivations do not exist in a vacuum. In other words, there will be plenty of incidences where both motivations influence a decision
We may choose to have an ice cream because we fancy an ice cream, in other words; to gain reward. However, if our friends are all buying ice cream, and we don't buy one too, we may feel like we are missing out. This part of our motivation is the avoidance of loss.
Time and again, studies have proven that human beings are far more motivated by the avoidance of loss, than the gaining of reward. For example, the majority of people spend their waking lives at work. Yet there are few who wouldn't work less or give up entirely if they were to win the lottery.
Now if the motivation for going to work was to gain reward, there would be no need to work less or give up work entirely. Most of us, however, go to work to avoid loss. In other words, we don't go to work to earn our salary. We go to work because if we don't earn our salary, we can't buy food, or clothes, or pay our mortgage. With enough money in the bank though, the avoidance of loss dissipates. In this situation, many people would give up employment or certainly choose to work fewer hours.
If we know that most people are more motivated by the avoidance of loss, rather than the gaining of reward, how does this affect our sales messages?
Traditionally many of us have been taught to sell the benefits of our product or service. However, this is a method of selling that focuses solely on the gaining of reward, at the total exclusion of the avoidance of loss. Moreover, with this revised view of how we really tick, we can now see that most people's major motivation when going to work is to avoid loss. This being the case, it means that most people, in the workplace, are risk averse. In business to business sales therefore, it makes benefit selling even less effective.
Grant Leboff is one of the U.K's leading Sales and Marketing experts. His fourth book, ‘Digital Selling’, debuted at #1 on the Amazon charts prior to being published in September of this year.