How loss aversion boosts motivation | Nudge Newsletter 🧠


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 👇

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 👇

Transform Your Social Marketing with Neuroscience-Driven AI™

Lately’s neuroscience-driven AI™ learns and adapts to your unique brand voice to create social media content that your audience will love.

  • +12,000% ENGAGEMENT – No, that’s not a typo.
  • +245% MORE CLICKS – More clicks = mo’ better.
  • +200% MORE LEADS – Higher quality leads for marketing and sales.

Our AI schedules and populates your social media calendar faster than you can grab a cup of coffee. ☕️

Want to sponsor Nudge? Here's all you need to know.

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

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

Read more from Nudge Newsletter

Disrupt Then Reframe Read online In his fantastic book 59 Seconds, Richard Wiseman¹ explains the “disrupt, then reframe” approach. The tactic briefly jolts someone out of autopilot with something unexpected, then follows with a straightforward request. In several experiments, researchers went door to door selling notepads for charity. The salesman would either say: 1️⃣ “They sell for $3. It’s a bargain.” 2️⃣ Or, they would introduce a small disruption: “They sell for 300 pennies — that’s $3....

Sharing Weaknesses Read online In the 1970s, researchers Jones and Gordon¹ from Duke University played people a recording of a man (really a stooge) talking about his life. During the tape the man explained he had not completed a school semester because he had been caught cheating and had been expelled. The researchers edited the tape so that: 1️⃣ Half of the participants heard this bombshell toward the beginning 2️⃣ Half of the participants heard it toward the end. Did the timing of the...

Mystery Effect Read online I submit a gas and electricity reading every month. Not because I'm diligent or disciplined. But because my supplier (Octopus Energy) nudges me to do so. Every time I leave a gas reading, they let me spin a wheel to win a potential reward. Most suppliers just ask for a reading (left). Octopus offer a chance to win (right). I've shared this before, but I haven't shared much evidence as to why it works. So, take a look at these images from a 2022 study¹.Which would...