Shoppers are more responsive to price increases than to decreases. For example, from July 1981 to July 1983, a 10 percent increase in the price of eggs led to a 8% decrease in demand, whereas a 10% decrease in the price led to a 3% increase in demand (Putler, 1992).
In another study, consumers were asked to either build up a basic pizza by adding ingredients (e.g., sausage and pepperoni), or scale down from a fully loaded pizza by removing ingredients. Consistent with loss aversion, consumers in the subtractive condition ended up with pizzas that had significantly more ingredients than those in the additive condition (Levin et al., 2002).
There are numerous ways in which loss aversion can be applied to your sustainability initiatives in-store and online. This bias can make it better for the planet, your brand and better for shoppers too.
Frame your offers
‘Save’ messages of twice as appealing as ‘Extra free’ offers. Shoppers want to hang on to what they already have more than get some more. So the word ‘Save’ can be used to reference numerous aspects of environmental concern.
Focus on what’s left
When sustainability minded shoppers consider your brand, remind them of what they won’t lose, more than what they’ll gain. For example, refill packs, retain the original container and give more product whilst helping shoppers retain more of their money.
Provide shoppers with an indication of not just how much can be gained, but also importantly, how much global resource can be ‘lost’ if they do not choose to buy it (act) now (‘only 3 left in stock’, for example).
In summary, loss aversion is an important aspect of everyday economic life. The idea suggests that people tend to stick with what they have unless there is a good reason to switch.