- What role does the concept of “loss aversion” play in buyer resistance? How can product managers leverage this knowledge to facilitate the adoption of new features?
Loss aversion plays a large role in buyer resistance. As describes in Eager Sellers Stony Buyers, loss aversion is the phenomenon in which consumers weigh the risk of loss greater than the risk of gain. In an experiment described in the passage, one group was given mugs and asked to name a price point at which they would sell the mug while another group was asked to name a price point they would buy the mug at. The disparity in prices highlighted loss aversion as the ones with the mugs were less willing to lose the mug in exchange for money. On the other hand, those without the mugs were less willing to pay high prices for the mug they did not have. Product managers can leverage this knowledge to facilitate the adoption of new features by framing and marketing products as them missing out on something rather than gaining a new benefit. This technique is used often in marketing where products are described as the next big thing and consumers fear they are missing out on the next big thing.
