If You Don’t Read This, You’ll Lose A Lot of Money

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“If I could show you how to 10x your negotiation results, how would that change your life?”

That’s what my one liner is (was) in my online marketing material to drive action like getting people to sign up for the newsletter or buy something. It basically says, “Do something and win.”

There’s a problem with this.

The problem with that one liner is it asks the prospect to think only of the potential gain. It pretty much ignores the theory and power of loss aversion.

What’s Loss Aversion? Tversky and Kahneman (these great economists and psychologists – seriously, they basically revolutionized decision making and behavioral economics) discovered that a potential loss yields double the emotional impact of a potential gain.

Why?

The theory suggests that we may be prone to be loss averse because, for most of our existence (living on the edge of survival), the loss of a day’s food could have caused death, whereas the gain of an extra day’s food would not cause an extra day of life (unless the food could be easily and effectively stored).

So what does this mean? Very simply, this means that I’m only leveraging half the impact that I could.

So instead of saying, “Do something and win.”

I should likely be saying, “Do nothing and lose.”

By doing this, in theory I should be able to leverage a greater emotional impact in the reader and therefore drive a bigger audience to make a decision.

Scary right!?!

Yeah, psychology gets weird and scary sometimes.

The thing is, we use this in negotiation all the time, unknowingly. One of the key things I teach is Tversky and Kahneman’s framing effect on decision making (which is related to their work on loss aversion).

We can use these powerful cognitive biases, which are hardwired into us, to drive decisions that are significantly more in our favor. But it takes planning and preparation. This is why negotiation planning is so important!

Here’s something a little scarier to consider, “If Mark is using these types of cognitive biases to try impact my life positively by improving my negotiation skills, could some people (political parties, hate groups, etc) be using these cognitive biases to impact my life negatively (or at least for their own personal gain with no reciprocal value)?”

Don’t let this newly acquired knowledge freak you out. Now you know better. So when you’re receiving a marketing message or a political message or a statement from a very experienced negotiator. Don’t react without first thinking, “What is the intention of this messaging?”

Likewise, now that you know this, you can start doing some reading to determine whether this is something you can start including in your negotiation toolkit.