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How loss aversion boosts motivation | Nudge Newsletter 🧠

Published about 2 years agoΒ β€’Β 1 min read

Losses motivate more than gains.

Imagine I gave you $4,000 to motivate your sales rep.

You'd probably set them a target like this:

  • Hit 120% of quota and I'll give you $4,000

But...

There's a better way to motivate.

Loss aversion reveals that losses are more salient than equivalent gains.

And when it comes to bonuses, the thought of losing a bonus is more motivating than gaining one.

Here's the study behind this insight πŸ‘‡

The right way to motivate the sales rep is to say:

  • We've added an extra $4,000 bonus in your pay check this month. If you hit 120% of quota, you keep it. If not, we'll subtract it from future months.

Big thank you to today's sponsor Lately. Don't miss this tech πŸ‘‡

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Cheers,

Phill

P.S. I don't listen to many podcasts, but one I tune into religiously is Dan Murray-Serter's Secret Leaders. It's fantastic. If you've got a spare hour this week, I'd reccomend his episode with Mo Gawdat. It's dynamite. Listen here.

This isn't sponsored. I just like the show.

Nudge Newsletter

Phill Agnew

I spend 18 hours each week turning marketing psychology into readable newsletters.

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