What do you prefer: winning or losing? | The Reference

You must be thinking: what a silly question, of course I choose to win, I do so every time! And until recently I would have agreed whole-heartedly with you. But, does this also apply when we want to convince organizations to take action?

I never really liked those consultants who sell (themselves) by playing the role of a scary prophet of doom. “Hire us NOW or your operations will screw up completely in no time”, or even worse “If you don’t put your money – preferably a lot of it - on the table to buy our advice, you will be bankrupt in less than three years’ time”. I believe that it is not done to try to sell yourself by anticipating on the most basic anxiety of every organization. I almost dare use the word unethical here, just because I am really convinced that you should bring a positive story while talking to a client: “Choose our solution and you will find that you have a lot to win.”

As a digital agency, here, at The Reference, we are putting digital transformation into practice every day, and this already for more than two decades now. With our credo -it’s more than digital, it’s your business- at the back of our minds at all times, we use a variety of well-chosen digital channels, bringing all their strengths together in a smart way, to create added value for our clients, to help organizations accomplish their business objectives, always with positive arguments, searching for the benefits, based on the promise of something to win…

And what are the mighty of this earth doing?

This morning I heard the new commercial of SAP on the radio. A key element in this commercial is digital transformation, and of course this drew my attention. I heard a voice actor say things like: “before your competitors do”. Although subtle, a reference to the fear of losing market share or profits etc. was present. And since I’d like to think a company like SAP knows what it’s doing, I couldn’t help but ask myself the following question: “Am I right to be focusing so hard on always bringing a positive story with my company?” The Reference is, after all, a commercial organization that needs to achieve its goals as any other company, and when the stakes are high, do we really need to worry about keeping our level of cuddliness intact?

A scientific approach

Amos Tversky and Daniel Kahneman were the first to prove that loss aversion  is a principle that is commonly used in economics and decision making. People have the tendency to prefer "not to lose" over "winning". From a psychological point of view the experience of losing is twice as powerful as the experience of winning. So... if we want to convince someone - and this is in fact the essence of sales - then it might not be such a bad idea to make use of this principle.

Cialdini, a professor specializing in marketing and psychology, further deepened his knowledge and even published a book about this topic: Yes! 50 Scientifically Proven Ways to Be Persuasive. He explicitly states that benefits should best be formulated in terms of loss rather than profit. He illustrates this by means of the following example: during a study a number of house owners were told that they could save half a dollar a day, by making energy-saving enhancements to their home. The control group was told that they would lose half a dollar every day if they did nothing. When both groups were asked if they would make these enhancements, the positive answer was given a whopping 300% higher in the latter!

(For those who are interested in the power of convincing I hereby provide a visual summary of Cialdini’s book 6 principles of persuasion.)

And what with my own experience?

Laziness is one of the seven sins for a reason. Consumers will always go for convenience. A web shop offering pre-ordering will undoubtedly be preferred over the one that is not. Users find it very convenient to be automatically informed about the desired product’s availability, in a prelaunch phase or when a product was out of stock. And why would you make the same effort of going to the site, search for the product, twice… if all this can be done in a single movement and with the same end result?  

Too often companies think: what is the percentage of products that can be ordered in advance? And from this small group it will only be a minority that doesn’t come back if they really want that product. Unfortunately, nothing is further from the truth. This completely ignores the fact that it is not just about that one particular order. By then this same customer entered his e-mail address in a form on another web shop. One that sells the same kind of product. This company will undoubtedly let its marketing machine do the work. After all, they dispose of an e-mail address and, well, what more do you need for lead nurturing? If you do it right it can even lead to up- and cross selling. And before you know it, company A has lost a customer to company B.

Based on this I can perhaps conclude that it is indeed the responsibility of an agency to properly advise customers and to warn them for the risk of losing customers if they fail to provide certain functionalities.

Timing is everything

Was it wrong of me to use a positive discourse? I still don't think so. A lot depends on timing. The Reference delivered a lot of innovative projects at a time when we were early adopter of these new technologies. We were often one of the first to explore new tactics. If our clients' competitors weren't using or doing this yet, there was definitely some market share to win.

This implies that a modified approach is required for those organizations who are not yet aligned with what is well established and mainstream. Energy suppliers, for example, who still do not offer a mobile app to monitor energy consumption will undoubtedly lose customers. In such cases, a slightly more stringent tone and rhetoric are certainly in place.

Don't want to miss any of our blog posts? Subscribe to our newsletter.

Would you like to exchange ideas with us –in a positive and constructive manner- about what digital transformation could mean for your company?

Contact us 

Don't miss out

The Reference has its office in the heart of Manhattan.
“I want to wake up in that city that never sleeps, and find I'm king of the hill, top of the list, head of the heap” – Frank Sinatra