Negative drivers.
Roger Martin-Fagg, the outstanding behavioural economist who has worked with Property Academy members for over two decades now, made a point on our most recent quarterly economic update that “people save because of fear.”
Now I’m sure there are other reasons too, such as for a holiday, or a deposit to buy a home, but Roger was seeking to highlight that household savings are considerably higher than average, or put another way, people have money to spend but are scared to do so.
This got me thinking about the difference between positive and negative drivers of behaviour.
We know how some people “impulse buy” when they’ve got disposable cash, whereas others are more considered, so drawing on the lessons learned when working with Bob Cialdini on his “Principles of Persuasion” workshop, I noted there are several applications that can be applied from negative perspectives in respect to these drivers.
Authority – We can be persuaded to do or buy something by someone in authority telling us we should – many in the health and fitness industry highlight the dangers of not exercising/eating poorly, more than they do the benefits.
Scarcity – We’ve all experienced FOMO and more, the feeling of increased desire for something you can’t get – hence why limited editions are clever ways to cajole us to purchase.
Social proof – perhaps the most powerful weapon when used negatively – “unless you have/use this (product/service) you won’t fit in.”
Roger also made the excellent point of the difference between Risk and Uncertainty.
Right now, many will say it’s a risky time in many parts of the world – and I’m sure that’s true. But perhaps more significantly, is how uncertain things are, not least with political instability, and also with the dramatic changes AI is enabling and powering.
My sense is that it’s the responsibility of leaders to quantify and communicate the things they are doing to mitigate risk, but perhaps even more important is to eliminate uncertainty as far as possible.
That said, this process can be utilised, (appropriately), to galvanise both teams and customers, indeed people are typically more motivated by the fear of loss than the pleasure of gain.
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