F.O.M.O. [Fear of Missing Out]

Author - Viknesh Ravichandran


Customer is always regarded as King in Marketing. And often Businesses speak about win-win. But if your company uses Loss Aversion Marketing, do you see yourself customer-centric and creating a win-win.


Let’s get a clear picture of what Loss Aversion is


Loss aversion is the tendency to prefer avoiding losses to acquire equivalent gains. The principle is prominent in the domain of economics.[Wikipedia] Customers are usually worried about what they might lose than what they might gain. For this reason, “fear of missing out” strategies are highly effective. When an alternative option is framed as a loss, consumers are more likely to opt and buy. For this reason, a concept called framing comes into play. This is nothing but the technique through which the advertisers present the decisions to consumers in a way that makes them more likely to pick from the pocket.


Commonly, consumers hate to feel they are missing out on a bargain, so make sure to emphasize if they are set to lose out. Loss aversion bias is a tendency to chuck out the possible negative outcomes. Research shows that people have a strong emotion for losing than for the emotion for gaining.



If someone offered a bet on a coin toss, heads or tails. And they called heads, they win Rs.1000. If they call tails, they lose Rs.1000.Researchers highlighted that most people are not willing to play the game. That is really because the reason behind is the joy of winning Rs.1000 can’t compensate for the pain of losing Rs.1000. Almost all are willing to play this game only if the winning amount is raised to Rs.2500. The joy of winning Rs.2500 begins to compensate for the pain of losing Rs.1000. To trigger buying decisions businesses can try activating the fear of losing.

Common ways in which the business tricks customer with Loss Aversion are as follows:

Time Limiting the time can Trigger Action: Offering an exclusive discount with a time constraint is a classic use of the loss aversion bias. These offers directly get into the unconscious brain and can trigger an immediate decision.

Limited Availability: Limiting the availability of induces loss aversion. “Only two left in stock” induces panic and aids in adding them to your cart quickly.

Framing: Framing can be defined as putting the terms of a decision into a strategic context which can override logic and reason.

Negative Impacts of using Loss Aversion

  • Puts Customer under pressure

  • Leads Customer to unnecessary buying

  • Damages Brand Value in the long run

  • Trustworthiness goes down

Insights from Prior Research

  • Research highlights that people are less likely to experience loss aversion when they are spending money that they have allocated already for specific purposes.

  • Loss aversion hasn’t been studied over the month- and year-long timelines marketers care about (to understand long-term effects on branding).

  • Loss aversion seems to be stronger for larger losses — and some research has struggled to find the effect for small losses.


Risk-Free Loss Aversion Techniques

Retargeting - Retargeting campaigns help in reminding the potential customers who left the website without buying. These campaigns allow to retarget them and show the visitors relevant visual or text ads when they visit other websites as well.

Cart Abandonment - Shopping cart abandonment is when a potential customer starts a check out process for an online order but drops out of the process before completing the purchase. At this very point, all they need is a little encouragement to get them to take the next step and make the purchase decision.

Make Real Loss Aversion - If loss aversion is used, go all-in, and make it believable. If required, run a limited period sale or offers. But make sure that it won’t be running and coming around the same customer constantly.




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