How To Manage Change Using Loss Aversion

Marketing psychology studies consumer behavior to find out the reasons and influences behind people buying stuff. And just as with any body of knowledge, it can be used well, or to take advantage of others.

A hard-wired human trait that marketers take advantage of is loss aversion.
One of the hardest instincts to overcome, loss aversion can be explained like this: It’s scarier to think of losing something that you already have, than it is to consider a possibly risky action to get something you want but don’t have yet. What you have is yours. A threat to it, or a hint of losing it, will hit you harder than losing a chance to gain something else.

Fear is a very strong motivator to hold onto things. When you have something, you have it: you can touch it, look it up, console yourself that it’s in storage. You know it’s there, you know you have it, and that knowledge keeps your stable world view secure. It also gives you some peace of mind that you have control.

Witness hoarders from the minimalist to the extremists, and how the storage industry helps people hide more stuff than they can fit into their homes. Think of the data storage industry and how it uses assurance to assuage people’s worries about data protection. In your own home there’s the catch-all drawer, and, well, how many old, busted umbrellas do you have hanging around somewhere?

No one likes losing stuff. Marketers from every niche and industry know it, that’s why there’s insurance for damn near everything. People also buy stuff motivated by the need to protect the things they already have.

All of that being said, how can use you use the power of loss aversion for yourself?

Knowledge is power, and now that you’re aware of how the threat of loss can affect your decisions, even subconsciously, how can you use that power to work in your favor?

Getting rid of deadweight.
Clinging can be detrimental in that you can hold onto things far longer than necessary. Which means you’re holding onto the idea of ownership and safety more than the reality of a thing’s value in your life.

And face it, change is awkward, uncomfortable and fear-inducing.
What if it doesn’t work?
What if I’ll need this someday?
What if it works and I become too something (busy, successful, overwhelmed) and can’t handle it?

Negativity is tied into loss aversion, too. With the focus on loss comes the focus on the bad things that can happen. So flip the framework.

What are the good things that can happen?
If it doesn’t work, you have proof, you can try something else?
How many of those thingamajigs do you have? How many are still good enough to function properly without updating?
What if it works and gives you more of the things you want?

Imagine yourself as a kindly mentor facing a nervous child on their first day of school. With your hindsight and experience, what reassurances will you give them to handle it well? What support will you give them to bounce back, make the best of their time, and make good in school? Now go back to the present moment. Don’t you think that advice can apply to adult you as well?

 

People know more than they’re consciously aware of, it’s just that fear quickly gets in the way, throwing up a smokescreen that clouds the mind and causes us to see things that aren’t really there. This leads to fears flickering from the corner of your eye and whispering from the back of your head.

Change is constant. Acceptance isn’t, and that makes change harder to live through.

We can recover faster when we give the appropriate time to accept the new changes and release the old stuff — and not revisiting again and again. If you need to set a time for it in a non-essential time-block, and take it as a practice of letting go mindfully. Revisits slow us down in that; like driving, we keep looking in the side mirror and not on the road in front of us. That kind of split attention makes for mistakes and accidents.

We like stability. We don’t like to move when we have ourselves a good thing, and tend to contract when we feel threatened. In extreme cases, change threatens our world view, and we feel the threat personally. At worst, a suggestion towards change is seen as traitorous, and someone’s attempt to help out is received as an insult. Don’t underestimate how the hind-brain will fight back when we’re faced with even the threat of loss.

Growth lies just outside the comfort zone… when the comfort zone expands, you grow with it. Loss aversion can actually help you make better decision so growth won’t feel so unstable.

 

Oddly enough, deliberate release can help you deal with actual loss: “This too shall pass.” The acceptance that life doesn’t go by our demands is the beginning of wisdom. Loss is a part of life, and it is our response to what happens to us that matters more than what actually happens. Hard-earned, painfully-won wisdom helps us navigate the changing fortunes of the times.

Work on it.
Labor pains, ha-ha, bring something new into the world. Think of your hardship as due diligence in creating something new in your life, whether it is a space for good things to enter, a service to help other people, or a product meant to address a need.

Take losses as part of the tuition for learning.
Is a mistake a loss? Are you a loser for making one?
Maybe what you lose is the ignorance, and what you gain is the new knowledge of what not to do?
Have you ever thought about it like that?

Give yourself time to reflect about what you learned about yourself and your work.
Nose to the grindstone behavior benefits no one. We all need time to un-clench and unravel from work and work-related issues — it is in the space of that unregimented, no-expectations, no-pressure time that our imagination and unconscious mind can expand and work on creating new connections and cement new learned things. We need time not to work so we can bring our whole humanity to the present, instead of the compartmentalization so often used while we’re in a high-pressure environment.

Protect that time fiercely.
The work will take and demand whatever you have, so you have to protect yourself and your time to the extent that you want to be the best person you can be, to the best work that you can do. It does no one any good to exhaust yourself, even for love, because everyone else is fixated on what they get, and not on what happens to you after they get what they want. It’s nothing personal, just business, after all.

Don’t be afraid to make mistakes in that time.
Airplanes take thousands of course-correction over thousands of miles to get to their destination. Each correction is — you guessed it — something to put the plane back on track. Every mistake you make while paying attention— can point you towards the direction you need to go to improve. That’s it. Nowhere in that does it say you’re stupid for not knowing things all along, or that it’s a personal failing if you fumble. Take each mistake as a course correction, and act accordingly. You may be closer to your goals than you think.

Be aware of the danger of clinging to the same-old, same-old.
Whether it’s environmental or a behavior, doing the same old things or staying in the same circumstances because you know them isn’t always enough. Knowledge doesn’t mean growth unless action is involved. Even action isn’t growth unless it makes you — and you choose to– handle the unfamiliar. Don’t keep doing the same things because you’re nervous or scared and need something familiar. In times of change, you can lead change by accepting it’s happening, and actually changing as well to adapt, not resist.

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