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Do more with less: leverage loss aversion to spur action

This post originally appeared on Segal Benz Insights on October 1, 2019.

Decades ago, economists noticed something odd. They observed that what people were willing to pay for something was not always the same amount a seller was willing to accept. To them, that made no sense—a dollar is a dollar, and the value of an item shouldn’t change based on whether somebody already owned it or not. But it did!

What economists and psychologists realized, together, was that people act in peculiar, yet consistent ways when it comes to trading the risks and rewards of losing something they already have to gain something new. For most of us, a loss is a more powerful motivator than a gain. This concept is known as loss aversion.

So, what does this classic economics story have to do with benefits communication? As it turns out, a lot! You can frame your communications around loss aversion to motivate people to act.

Using Loss Aversion in Benefits Communication

You can choose to present the same information in different ways. Often, our first instinct is to use positive framing to keep the tone of our communications warm and supportive. But the idea of losing or missing out on something can be much more powerful than promoting the positive aspects of that same thing. Here are 4 ways to leverage this concept in your benefits communications.

1. Encourage specific health actions.

Decisions that involve risk and loss weigh heavily on people. This is especially true when it comes to their health. People tend to prefer the sure thing over a gamble when the outcome is positive, and they prefer a gamble over a sure thing when the outcome is negative.

Therefore, in health communications, use positive framing for actions that don’t have a risky outcome (e.g., wear sunscreen, drink more water). But when something could have a scary result, such as detecting cancer, it’s more effective to use risk-framed messages. For example, instead of touting a colonoscopy as a way of keeping your colon healthy, say it helps to detect colon cancer.

2. Promote a one-time, immediate action.

“Don’t miss out” is a staple of marketing campaigns. In benefits communications, the phrase is used quite effectively in conjunction with enrollment activities. And the concept itself has moved into the mainstream—it even has its own acronym (FOMO, anyone?). Still, there are other ways to inspire immediate action with messages framed around loss. Try a different take on “don’t miss out” when you need to encourage people to sign up for webinars, classes, and other onsite events. Phrases such as “Reserve your spot now—only 4 left!” can generate that same sense of missing out, and spur action.

3. Support sustained action.

When you ask people to adopt new habits, challenge them to track their success in sticking with the new habit using a calendar or other daily planner. What this does is create a streak—and no one likes to break a streak! I have one friend who has maintained his running streak for more than 1,000 days now; you can imagine it would probably take an act of God for him to miss a day at this point. You can even turn streaks into company-wide or department-wide challenges, so that everyone gets in on the fun to see who can have the longest savings or health-related streak.

4. Highlight underused benefits.

We worked with a client to develop an often-missed benefits tip sheet that was prominently placed on their benefits website. This unique flip on framing—using “often-missed” instead of “must-try”—activated a sense of urgency and, therefore, promoted action. This tip sheet was one of the most downloaded pieces for many years.


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