Losses Feel Worse Than Gains

Kahneman proved that "𝘭𝘰𝘴𝘴𝘦𝘴 𝘧𝘦𝘦𝘭 𝘵𝘸𝘪𝘤𝘦 𝘢𝘴 𝘱𝘢𝘪𝘯𝘧𝘶𝘭 𝘢𝘴 𝘦𝘲𝘶𝘪𝘷𝘢𝘭𝘦𝘯𝘵 𝘨𝘢𝘪𝘯𝘴".

So, Nationwide don't say:

❌ "We've kept our Holloway store open. So you can keep banking in-person."

They say:

✅ "Santander is leaving Holloway. Maybe it's time you left Santander."

It's the best ad I've seen in weeks because it concretely applies behavioural science.

Highlighting what a customer will lose is often more persuasive¹ than highlighting what they'll gain.

Richard Chataway in Behavioural Business claims this loss-framing messaging reduced churn by 44%.

The original loss aversion study

In a study by Aronson² (1988), 404 homeowners received insulation information.

One group was told the potential gains of insulating (saving 75 cents/day), while another was warned of losses if uninsulated.

The loss frame led to a 56% improvement in sign-ups.

Did you like this newsletter? Reply to let me know. — Phill

P.S. I'm working on something new. Take a peek here.

¹Behavioural Business, Richard Chataway (2020)

²Applying Social Psychology to Desegregation and Energy Conservation (1988)

As a behavioural science practitioner, I believe in the peak-end rule*

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