“Why are most fundraising emails so dire?” That’s a question I’m often asked during trainings from candidates and staff who are hardwired to project only confidence about their campaign.
Take a look at this fundraising email with the subject line “STUNNING defeat” from the Democratic Congressional Campaign Committee (DCCC), an organization notorious for their apocalyptic pleas:
This fundraising text message from the Trump campaign, which has hundred of millions of dollars in cash on hand, is another example:
Do these urgent warnings that make the asker seem desperate actually work? Absolutely. In fact, they typically raise more money than strictly positive messages. Why? The answer is loss aversion.
What Is Loss Aversion?
Loss aversion is a key concept from the field of behavioral economics and describes a cognitive bias where an individual feels more pain from a loss than benefit they would receive from a gain. Suppose I offered you a bet where you have an equal chance of gaining $125 or losing $100. Mathematically speaking, that’s a really good bet, but in similar experiments, most individuals would pass on the gamble.
The pain from losing $100 isn’t worth the potential gain from winning $125. In fact, Nobel Prize-winning economists like Daniel Kahneman and Richard Thaler have found that we dislike losses over two times as much as we prefer gains.
Loss aversion means that individuals will do more than twice as much to avoid losing something than they will in order to gain something.
That’s what makes its effects such a powerful motivator in online fundraising emails.
How to Use Loss Aversion to Your Advantage
Consider what you’re asking a supporter to do when you send a fundraising email:
- They’re focused on something, like working, watching Netflix, or waiting in line for school pickup and your email distracts them from that.
- If they decide to open your email (something as many as 90% of recipients won’t do, by the way), they’ll spend a few seconds scanning it to determine if they need to take action.
- The few that make it this far then click through to your donation page and have to enter in their information.
In other words, it takes some effort to donate to a campaign online.
If your supporter thinks there’s a risk of losing something important to them – like votes on legislation, an elected representative who shares their values, or even just losing an election to the opposing party – they will expend twice as much effort to avoid the loss than they would to get a benefit.
Emailing supporters about a poll that shows your candidate losing by a few points will raise more money than an email about a poll that shows your candidate winning by the same margin. Letting your donors know you were outraised a little bit by your opponent or that you’re slightly behind on your fundraising goal will motivate them to donate more than if you weren’t at risk of being outspent.
Loss aversion’s effects are only relative to where a supporter perceives their current condition. While being down 5 points in a poll is a better motivator than 5 points ahead, being 20 points down isn’t four times better. If a supporter never thought your race was winnable in the first place, they won’t treat it as a loss in their mental accounting.
Cognitive biases, like loss aversion, must be used responsibly – never exploited – by candidates and their campaigns. Guide your supporters to take action they want to take while helping them overcome the tricks our minds play on ourselves.