[Reading Time: 3m 51 sec]
Happy Monday! I’m back from a weeklong trip to Maui. This time of year is prime season for humpback whale watching – I highly recommend you check it out if you ever have the opportunity.
I went on two separate boat excursions and must’ve seen 50 or more whales during my visit.
And all this whale business got me thinking:
Why did I go to Maui and buy a whale watching excursion and a separate snorkeling excursion?
Read also: why do we buy anything?
There are two main drivers for why we make purchasing decisions: the emotional pleasure and pain, or the utilitarian loss and gain, which are similar enough.
I recently had an email exchange with my friend Jason about this. He believes that we buy for both reasons, whereas my perspective is much more strongly in the pain camp. Which is to say, we’re more likely to buy in order to stop or lessen pain (or loss), as opposed to increasing pleasure. The hard thing about parsing which to focus on is that pain and gain are mirror images.
Jason is right that some of our purchasing decisions are driven by pleasure. I went to Maui because I wanted to. I bought the whale watching and snorkeling excursions because they brought me joy. Sure. That’s totally true.
But this level of purchase isn’t helpful in explaining larger purchases that require significant dollar amounts, change from the status quo, and buy-in from multiple parties.
Even on the individual level we can see that there’s probably pain involved in seemingly pleasure-seeking purchases. Why do people buy Rolex watches or Bentley cars?
I’m speaking as an outsider because I don’t own a Bentley or Rolex. Caveat over. Here’s what I believe. They’re symbols of wealth because there’s no added utility – you can tell time with a cheap watch, and you can get around fine with a regular ol’ car. But the brands signify success, achievement, and status. A Rolex says “I’m an important person in this meeting.” A Bentley screams “look at how successful I am.” Of course some people just appreciate beautiful (and expensive!) things, but social status is a driver.
Which brings us to the edge of a semantic argument. Are people driven to express their social status out of the dread of being seen as average? Or because it just genuinely makes them feel good, full stop? I don’t presume to know what’s driving any individual, but given the opportunity cost of these luxury purchases there must be some degree of pain driving them.
Now to the science. Here’s what we know: pleasure definitely plays a role in decision-making, although most research clearly shows the effect of avoiding pain to be far greater. In English, people both seek pleasure and actively avoid pain in their decision-making. Or as one research paper puts it:
“The present results support the hypothesis that maximization of experienced pleasure, and its counterpart minimization of displeasure, occurs in the process of decision-making.”
So both are there, and academia once again succeeds at telling us the obvious. But how much of one or the other influences our decision-making? It’s a question still up for debate, but this quote from another research paper may help us get closer to an answer:
“The increased pain of a worse exchange exceeded in magnitude the increased pleasure of a better exchange.”
Once again, and in English, the effect of avoiding pain seems to be greater than the effect of seeking pleasure. Here’s what I’d say: they’re two sides of the same coin, but there’s no purchase without significant pain.
Take for example software development services: the buyer wants to create something new and novel that makes them money (gain), but they also want to avoid stagnation, irrelevance, and unnecessary maintenance costs (pain). Making a new app will increase gain and lessen pain.
What’s missing from the discussion is the opportunity cost of change. If I spend money developing an app, I can’t spend that money on something else, and I’m also devoting precious time to it. So while there’s the potential for gain that comes with something new, there’s also the expected pain of change.
Every purchase will have pain associated with changing, and pain associated with not changing. You have a motivated buyer when the pain associated with the status quo is greater than the pain of change. Because yes, there will be pain involved in changing.
The bottom line of the pain v. gain argument is how to apply it. Jason argued that it’s far more effective to lead your marketing and prospecting with a gain argument. For example, “Can I show you a simple approach that’s helping clients close 3x more deals without needing more or different leads?” I agree, especially because the loss is implied in the statement. The inverse of that same question is “Did you know you’re only closing a 33% of the deals of you should?” Who would want that?
Again, they’re mirror images. Test to see which messages get the biggest response for you.
Which brings us full circle, and to my personal bottom line: I still believe pain is the deepest motivator.
Perhaps it’s the Buddhist in me who believes “pain in life is inevitable.” He said it, not me.