How to leverage loss aversion in learning design

February 10, 2022

Imagine that you work in sales. 

You have 20 days annual leave as standard but you can earn an extra half day of holiday for every month that you hit your target. Sweet deal! 

Then imagine a different situation. 

You’re given 25 days of annual leave, but you lose half a day of leave for every month you don’t hit target. Harsh!

Loss aversion is the name given to the phenomenon that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. Essentially, as humans, we’re much more motivated to avoid loss than to seek out gain.


2 strategies for leveraging loss aversion in digital learning:

Framing

How many adverts have you seen today alone, trying to convince you that your life will be infinitely better once you have that particular new product, service or subscription? Have you noticed how many of them start by talking about what you have lost? ‘Regain your natural smile’, ‘feel young again’, ‘recover quicker’. 

There’s a reason for this - we hate the idea of losing something more than we like the idea of obtaining something new, so it’s often more effective to draw attention to what we stand to lose by not having that product, service or subscription in our lives. FOMO is real my friends, and we can use it to promote positive behaviour!

Try: Framing your learning around maintaining rather than gaining a strong position.

Two ideas for framing loss aversion:

1. If your organisation is already ethical, show learners the role they play in keeping that competitive advantage. This is likely to have more impact than trying to motivate them to achieve a bigger advantage. 

2. Rather than a meaningless badge or certificate, you could implement a passport to practice or a licence to sell. This could be revoked if you don’t demonstrate sufficient effort to keep up-to-date.

How can you show learners what they stand to lose by not taking the learning seriously or acting accordingly?

Activities


Imagine someone offering you ‘credit’ points on your driving licence if you consistently drive safely and carefully. Do you think you’d pay any additional attention to your driving? What about the very real threat of losing your licence if you speed or drive dangerously? We all take that pretty seriously and it effectively controls the driving standards of the vast majority of the population. 

The threat of losing the licence is a bigger motivator than the potential gain of credit points.

Try: designing activities that encourage learners to avoid loss rather than seek out gain.

Two ideas for activities that play on loss aversion:

1. Give learners 100 points at the start of a digital simulation that they have to try and hold on to, rather than a starting point of 0 with 100 to potentially gain.

2. Create a short, sharp learning experience where learners watch a quick video and are done. Unless, of course, they fail the test. In which case they need to give up more time to complete more detailed learning. 


How can you play on the human motivation to avoid loss in your learning design?

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