profile

Nudge Newsletter

How loss aversion boosts motivation | Nudge Newsletter 🧠

Published almost 2 years ago • 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 👇

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

Phill Agnew

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

Read more from Nudge Newsletter

New and Safe Effect Read online In the early 1970s an ambitious young director released his film THX 1138. The concept went against many of the typical Hollywood storylines at the time. Set in a dystopian future where sex is outlawed and drug-taking is mandatory, the film was wildly different from what audiences were used to. The film was also a massive flop. Despite the a-list cast and big marketing budget, few watched it. The young director was discouraged and almost gave up until he read...

about 17 hours ago • 2 min read

Generation Effect Read online This ad outside my local opticians sticks in my mind. "Blink if you need an eye exam." At first glance, it's bizzare. It doesn't promote the business, showcase a promotion, or entice people in. And yet, I think it's weirdly effective due to the generation effect. In 1978, researchers¹ asked participants to either read work pairs or generate missing words from cues. For example: Read condition: hot → cold Generate condition: hot → c___ Those generating answers...

8 days ago • 1 min read

Isolation Effect Read online Noah Kagan tested his book cover design by photoshopping the book onto shelves to see what stood out. The green cover isn't different, but it is distinct. In 1933, German researcher Hedwig Von Restorff¹ published a paper on memory and distinctiveness. She gave participants long lists of letter combinations to remember (e.g. JTSW, UCSM, PLST), but among them was a single number sequence: 9125. When participants returned after a distraction task, Hedwig found that...

15 days ago • 1 min read