Enhance Productivity and Efficiency with Stephen’s Innovation Insights

Innovation Insights by Stephen Shapiro

Which magazine do you think men are more likely to buy:

  • a men’s health magazine with the cover, “Lose Your Gut Fast” or
  • a similar magazine with the cover, “Get Six Pack Abs”?

One study showed that over 80% of men chose the first cover – “Lose Your Gut Fast.” Why?

People are more interested in avoiding (or reducing) pain than they are in increasing pleasure.

The Austrian economist, Ludwig von Mises, once said that three requirements must be present for an individual to change:

  1. The individual must be dissatisfied with the current state of affairs.
  2. They must see a better state.
  3. They must believe that they can reach that better state.

That last point is critical as it relates to the “gut” issue. When someone is 20 pounds overweight, as many Americans are, six pack abs may be desirable but seem inconceivable. I sometimes joke that I would be happy with a “two-pack.” Only when your gut is gone will the idea of six pack abs seem like a possibility.

Tversky and Kahneman demonstrated how people change their perceptions when the same problem is stated in different ways. The classic example is the “Asian disease” problem (1981) where a group of individuals were asked the following question:

Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed.

  • Program A, which will save 200 people
  • Program B, where there is 1/3 probability that 600 people will be saved, and 2/3 probability that no one will be saved

Which of the two programs would you choose?

Tversky and Kahneman found that 72% of those asked chose the “risk averse” position – Program A. The prospect of saving 200 lives with certainty was more promising than the probability of a one-in-three chance of saving 600 lives.

A second group of respondents were given the same story of the Asian disease problem, but were provided with different options.

  • Program C, where 400 people will die.
  • Program D, where there is 1/3 probability that nobody will die, and 2/3 probability that all 600 people will die.

Which of the two programs would you choose?

A whopping 78% of respondents in the second problem chose the “risk taking” position – Program D. The certain death of 400 people is less acceptable than the two-in-three chance that 600 people will die.

Of course, options A and options C are identical, as are options B and options D. Yet the different phrasing stimulated completely different responses.

This study again shows that people will take greater risks to minimize (or reduce) their pain, yet they will play it safe when the option is to increase their pleasure.

Barry Schwartz provides some other excellent examples in his Scientific American Mind magazine article (August/September). One example he sites: “Appeals to women to do breast self-exams that emphasize the benefits of early cancer detection (gains) are less effective than those that emphasize the costs of late detection (losses).”

In my article, “How to Tell If Your Intuition Is Good,” I discuss how we get attached to what we have. When taking a test, we remember (painfully) situations where we had an answer correct, changed it, and therefore got it wrong. Surprisingly, we rarely notice the reverse. We are more aware of our losses than our gains.

Many years back I did work for a client. Although I would have been happy to do it for $9,000 (not actual figures) they agreed to pay me $10,000 for my efforts. Unfortunately, due to shoddy work by a subcontractor, I volunteered to refund $1,000 (out of my own pocket) to the client, netting me $9,000. Interestingly, I would have been happy getting paid $9,000 for the job, yet getting $10,000 and losing $1,000 still irks me to this day.

The loss of $1,000 hurts worse than a gain of $1,000 feels good.

When you are trying to get someone to change (or buy your product/service/ideas), do you focus on their gained pleasure or eliminated pain? From my experience, the latter is much more effective.

What are your examples of where you changed your language and got different results?

  1. A quote from “How to Make Wealth” by Paul Graham
    “The all-or-nothing aspect of startups was not something we wanted. Viaweb’s hackers were all extremely risk-averse. If there had been some way just to work super hard and get paid for it, without having a lottery mixed in, we would have been delighted. We would have much preferred a 100% chance of $1 million to a 20% chance of $10 million, even though theoretically the second is worth twice as much. Unfortunately, there is not currently any space in the business world where you can get the first deal.”

  2. Steve,
    Good coverage of an interesting and practical aspect of cognitive psychology. The applications are limitless. For example, selling insurance isn’t about providing peace of mind, but painting a picture of what would be lost if a catastrophic event occurred and the person was not insured. Also, once we know people are risk-averse, if we were pollsters and wanted to slant survey results, we simply need to think about how to word the question.

    When we’re thinking about whether to take a “leap” in our personal or professional lives, perhaps our final decision depends on how much we focus on the potential benefits versus thinking about the potential losses (which already have greater salience on their side).

  3. Richard Brandt says:

    I think it was a Peanuts cartoon with Snoopy, the dog playing tennis, where Snoopy says: “It doesn’t matter if you win or lose, til you lose.”
    As a Minnesota Vikings fan, I remember losing a playoff game to the Dallas Cowboys and our fan’s thinking that Drew Pearson had pushed off before making the winning catch. Baseball fans from Atlanta may forever feel the same way about the Minnesota Twins first baseman. Another example is the civil war. People in the north don’t give it a lot of thought.
    I think that if we let our aspirations (goals that make our here and now more valuable instead of worth less.) arise from what we like or value about an activity, we can make fear of failure irrelevant.
    For example, playing tennis a few days ago, I noticed that I enjoyed moving to the ball and hitting it where I wanted it to go. I saw that these aspirations (to continue to do this) led me to: being happy with the fact that opponents could hit the ball to various places on the court. It also led me to asking myself: “Where do I want to hit the ball? and what sort of shot do I want to hit to that area in terms of height, speed, spin, and willingness to miss some shots?”

  4. Great article Stephen. It was interesting to see how my wife responded to the same said questions and how I did. Language is so powerful and I think the earlier we can teach people (i.e kids before they become hung up adults) about the use of language the better more rounded people can be about taking risks.

  5. My company just ran a free seminar 10 days ago as a way to market our consulting services. Reading this article earlier would have led me to focus more on loss avoidance as way to increase the response we received from potential clients.

    No use crying over spilt milk. In any case, we did have some companies showing interest. We will repackage our future presentations to them in the light of the information here and thus improve our chances of converting some to clients. Thanks.

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