Count Your Losses

A few weeks ago, I flew from London to New York.  I knew what to expect – or, more to the point, what not to expect:  food.  Most airlines don’t offer complimentary meals any more.  Some don’t even provide snacks for purchase.

Imagine my surprise (and delight), then, when Continental Airlines served an in-flight meal and snack.  It was nothing fancy, but I felt cared for…pampered.  It cost Continental very little.  But it paid a significant psychic dividend.

Between forkfuls of chicken, I had a marketing insight:  if you want to delight a customer, give them back something they’ve lost.   Marketers spend billions of dollars annually on customer research.  We try to identify, test and anticipate unmet needs.  But people care more avoiding and/or recouping losses than acquiring something new. Behavioral economists call this loss aversion.

So, the next time you want to delight a customer, why not count their losses?  Then, see if you can find a relatively inexpensive way to recoup what they’ve given up…at least some of it.  Many of us have experienced cutbacks over the past 12 months — in spending power, in job security, in long-term savings. For many companies, a smart way to prepare for the “re-set economy” is to give something back.

To reach Meg Wildrick:

Phone: 212.840.0095
Twitter: @megwildrick
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