I used to play a lot of poker when I was younger. In fact, it was my main source of income for a while. I mention this because I am increasingly aware of how the strategies I used in poker are echoed in modern behavioural science.
I was reminded of this a couple of weeks ago whilst watching a video of Rory Sutherland at Nudgestock (the world's largest festival of Behavioural Science and Creativity) last year. Rory, widely regarded as the doyen of wisdom on behavioural science applied to marketing, was explaining that Loss Aversion Bias, one of the best-known biases, may not be a bias at all. Instead, it may be the mathematically correct way to behave, and the maths that showed it to be a bias was flawed.
Loss Aversion Bias is a cognitive bias that suggests that people feel the pain of loss much more acutely than they feel the pleasure of equivalent gains.
We're actually more loss averse than economists think
To explain, Rory used an analogy involving betting on a coin toss. As any fool knows, this type of analogy is the simplest way of explaining the repeated outcome of a situation involving probability. It's often used to explain poker.
Rory argued that behaving in a way consistent with Loss Aversion Bias indemnified you against a run of bad luck. Taking risks was more likely to lead to a loss than a profit, even when the odds are in your favour. This seems counter-intuitive, but then, so is much of behavioural science. It is this constant evolution and learning that makes the subject so exciting.
Harnessing behavioural science
Bringing it back to what we do, having a good understanding of behavioural science and how different biases are relevant is fast becoming essential to running campaigns that outperform their KPI's.
No one gets it right every time. However, brands and organisations that understand behavioural economics certainly produce more effective campaigns more often.
If you're interested in this subject, we'll be covering how to use Loss Aversion Bias and many other behavioural insights in my course ‘Killer creative for behaviour change campaigns’ on 29 September 2022.
Make sure to get your tickets early, I'm expecting a full house.
More about the author
Jon Lilley is a creative director with more than 30 years experience in advertising, commercial media and content marketing. Over the course of his career, he has been responsible for numerous award-winning government and COI campaigns including Alcohol Harm Reduction, Teenage Road Safety, Teacher and Childcare Recruitment and many others.
Jon now works in the public sector, bringing the skills and strategies he has learnt over the course of his career to local government.