With loss aversion, individuals are more motivated by the fear of losing something they already have than by the prospect of gaining something new. This is influenced strongly by what the reading references as “the endowment effect”, where people value products “that are part of their endowment” more than those that aren’t already and could be obtainable. As such, when a new feature or product is introduced, potential users may perceive it as a threat to what they currently have or know, causing buyer resistance.
Product managers can leverage this to help with the adoption of new features in a few ways. For example, they can frame their marketing efforts in a way that highlight the potential losses or missed opportunities if the new feature is not adopted. For example, showcasing how the existing solution may become obsolete or less competitive can motivate users to take action. In addition, something like a risk-free trial can reduce the concern of loss associated with adopting a new feature. Users can try the feature without committing fully, alleviating their fear of losing their existing status quo. Alternatively, product managers could also seek to highlight the current pain points and drawbacks of the status quo to make the losses associated with the current situation more obvious. Then, they could position the new feature as a solution that eliminates those pain points altogether.
