There are many things that drive people to make decisions, anything from friends and family to age and location, the list can go on for days, this is because we all have different combinations of influence, but all of these factors fall into two categories; external influence and internal influence. By taking into account the external influences that people have and not only being aware of the internal ones, but using them in your marketing and sales, you can double, triple, or even quadruple your sales and lead generation. Loss Aversion is one of those internal influences, that is so powerful that people like Jeff Walker and Brendon Burchard have built their entire business’ off this very principle, and chances are, they didn’t even know it.

What Is Loss Aversion

Loss aversion is based on the idea that we feel good when we gain something but feel really bad when we lose something. Our feelings towards loss and gain are not equal, we feel a stronger negative feeling towards losing something then we do, a positive feeling when we gain something.


An experiment done by Dan Ariely, showed two employees, both having to sell a certain amount of TVs, both were given money to sell the TVs, but framed in different ways, one was framed as gains and one was framed as loss, the one employee that was framed as gained was given the incentive to sell by giving him a $12 commission for every TV sold. The other was given only $10 per TV sold but instead of a commission for each TV, the employee was given all the money for all the TVs up front, and for every TV he didn’t sell the company would take money away. The studies showed that even though the second employee was only given $10 per TV, he ended up working harder to sell the TVs and ultimately sold more than the employee that was given more per TV.


The reason this worked was because the employee that was getting more per TV had no attachment to the money he was receiving, whereas the employee who made $10 per TV, had a connection and ownership of the money, so taking it away felt much worse.

The Revolutionized Online Sales Letter Using Loss Aversion


Jeff Walker, the creator of product launch formula, revolutionize the traditional online sales letter, by replacing it with a series of 3-4 jam-packed educational videos that give almost full access to the content of the product, each video ends with a call-to-action to the next video, he then ends the full series of videos with a purchase call-to-action and an expiry to the offer. What this does essentially, is say; you’ve had full access for these 3-4 extensive videos, if you would like to continue to have access then you have 10 days to decide.

By this point in the sequence if viewers have made it this far, then they more often than not, did enjoy the content, since it is quite an investment in time, if they did, then they are the exact target audience which would have gotten tons of value from the series, and after investing so much time Jeff only gives a small window of time for them to make a decision if they would like to continue to have access, but in order for them to continue to have access, they need to pay for it. Instead of gaining something, they’re losing something which is more compelling.

Jeff discovered this formula over time, but I’d be curious to know if Jeff is aware that seeded throughout his formula is the psychology of loss aversion.

Loss Aversion In Traditional Marketing

For years, marketers have been using this technique, for example; “50% off the entire store – sale ends Friday”. 50% off is ok, but it’s not going to get us off our seats, we might or might not want it, but threaten to take it away by Friday, and we’re there.


If you look at most advertising you can see loss aversion at work, a sale on an item you don’t need for instance is still an item you don’t need, yet people are more compelled to buy. Buying something you don’t need just because it’s on sale doesn’t mean you actually saved money, but sales have deadlines, and deadlines make us feel like we’re losing out on something.

Perception Of Loss Aversion Through Framing

At its core, loss aversion is the act of averting the loss of something you own, in understanding this principle, a business can use loss aversion in marketing by implementing a perception of ownership by framing the offering the right way. For instance, Instead of saying, “By using our product you gain more time to spend with your children”, you can say; “Stop losing out on the most precious time in your children’s lives, buy our product now and take back control of your time”. Although both are the same, one highlights what you have to gain by purchasing, and one highlights what you have to lose by not purchasing.


Loss Aversion Is Based On Giving And Taking

What people don’t realize is that loss aversion is all based on giving and taking away, give as much as you can so that people become accustomed to it, the idea is that you want to make people’s lives easier, so that they don’t want you to take it away, I know it sounds mean but it’s really not, every time you see a counter counting down on a website, or webinar sign up with “only 2 seats left”, that’s loss aversion in full effect, every time you download a 30 day free trial, that’s loss aversion, because you’re inevitably going to lose access in 30 days.


The very fact that we sit through TV commercials is loss aversion, when you sit through a TV commercial, you’re sitting through something you don’t want because the network has given you full access to something you want – a show, then restricted access to that show for a few minutes hoping that you won’t want to miss the ending of that show.

Using Loss Aversion For Lead Generation

When the networks sit you through a commercial they’re asking for something in return for access, and you can do the same thing, provide something that you know your audience would love, and then at the end provide a call-to-action.

For blog posts, make sure to always put a call-to-action at the bottom of the blog post giving readers the option to continue their education on the subject you’re writing about in return for their contact information.

If your blog post is about “5 ways to do this..”, and you have an ebook offer about the “top 10 ways to do this”, then on one hand, the reader can gain 5 extra ways to do this, or they can lose the opportunity to learn about 5 extra ways to do this.


For videos and sales letters, there’s a very popular formula for scripts called the PAS, which stands for; Problem, Agitate, Solution (or Solve).

The Problem should be a problem that relates to your audience, making your viewer say, oh ya, that’s true, that does happen all the time.

Then the Agitate should be a story where that problem always happens, so your audience says, oh man, I really have a need to solve this problem.

Then the Solution is – usually your product, so your audience says, I can totally see how that product can solve my problem, this is usually reinforced with some testimonials and wrapped up with a purchase call-to-action.

To use loss aversion, you need to add an extra “P” to the end of the video, a cliffhanger if you will, and the next video, blog post or ebook will be the solution, but in order to continue to have access, they need to provide their contact information.

Using Loss Aversion In Sales


In sales, If you’ve had a sales rep ever send you emails trying to gain your business, they may have, at some point, used loss aversion in their email sequence, if you’re not answering their emails, or you’re not closing the deal, they may offer you a discount of some kind, authorized by their manager, but limited in some way, either by time, or quantity, etc.


Using loss aversion in your inbound marketing program can increase results dramatically. Using it on your landing pages and call-to-actions can completely increase your conversion rates.

Loss aversion is just one of many tactics you can use in your inbound marketing program to help you maximize your traffic, leads and sales.

Your website is broken, and most likely, it’s leaking visitors, but you can’t fix it because you don’t know what to look for. Don’t miss opportunities to capture every visitor that comes to your website, don’t lose potential sales just because you’re uneducated, download the free ebook below to learn how inbound marketing can help you capture every visitor that you’ve put time, effort and money into attracting to your website and turn them into sales for your business. (See what I did there) – Start maximizing your website right now

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