Fly on the E-Commerce Cyberwall

Fear of loss
I saw a sign today, covered with a tarp. I'm sure that sign has been there for years and I've never paid attention to it. But seeing it covered made me want to stop the car and peek under that tarp to see what it says.

Weird, huh? But that's the way our minds work. Confront us with something out of the ordinary and we fixate on it. "What is it? What does it mean?" And most importantly, "What am I not being allowed to see?"

One of the most important forces that drives us is fear of loss. Put something just out of reach and we want it—NOW. It's all part of our drive for self-protection.

We grow up learning how to control the world around us as much as we can. The more we learn, the more effectively we feel we are controlling our lives. But present us with a piece of the puzzle that we don't have and that piece takes on increased significance for us; it becomes a must-have item.

That's why so much of sales is based around magic words like, "limited time offer," or, "while they last." Take a marginally attractive offer and set it to trigger people's fear of loss and you move many of them from thinking about buying it someday to finding it hard to walk away from it for fear that they'll regret losing such a great offer.

As marketers, fear of loss works both for us and against us. By creating a sense of urgency in potential buyers through a limited time or limited number, we trigger their fear of loss and force them to decide right now whether they want your product. In some people, fear of loss is so powerful that it can push them to buy something they really don't need simply because they might need it someday and don't want to regret having to pay full price for it then if they ever buy it.

Recognize the incredible power of tapping into people's fear of loss by giving them a reason to buy now instead of later. It's a powerful way to boost sales.

Recognize, though, that fear of loss can effect us, too. It can push us into purchases we wouldn't ordinarily make if we took more time to consider whether we really need what we suddenly fear losing. And fear of loss can lead us to save things we don't really need out of the concern that "we might find a use for it someday."

Know your goals. Have specific goals. And apply those goals to any potential purchase you consider making for your business (or for yourself). Don't get lured into buying simply because something that looks like it could be useful threatens to make you pay more if you don't buy it now.

Compare your potential business purchases to your business goals. Hard-heartedly turn away whatever doesn't immediately contribute to achieving those goals. You're better off accomplishing your current goals rather than running off in pursuit of new ones. And if a potential purchase fits into your goals, calculate how much you can realistically expect that purchase to earn you when you put it into practice.

Buy it only if the cost (including the amount of time it will take you to learn or set up or do whatever you need to do with the product) is considerably less than the amount it will help you earn. Don't be vague and figure, "It will make me lots of money!" Actually calculate how much the product will add to your bottom line. Controlling your own fear of loss will save you lots of money on unnecessary purchases.

Understand fear of loss, how it works on you, and how it works on your customers.
Jeff