It’s a feeding frenzy right now in Australia as health insurance companies use the April 1st price rise to try to win customers looking for a better deal.
That means lots of ads and lots of deals. On TV, radio, in print and online…messages about health insurance are everywhere.
So how to stand out?
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If you are ‘ahm’ by Medibank you cleverly capitalise on a pain point that many with insurance feel – paying for ‘extras’ that you don’t end up using. But the clever thing isn’t simply that they’ve zeroed in on this (they are not the first), the clever thing is how they’ve expressed it.
Figure 1. ‘ahm’ website value proposition
“Waste nothing” is the catch cry for their campaign. Not “save something”,“waste nothing”.
Contrast that with a more familiar marketing ploy to reward behavior, such as Bupa’s $100 gift offer.
Figure 2. Bupa website value proposition (if you can call it that)
Different emotional impact, right?
Now the specifics of the deal/policy differ and Bupa may actually offer more/better/whatever; that’s not what I’m interested in for our purposes.
What I am interested in is ahm’s use of Loss Aversion – the behavioural bias that means people are more motivated to avoid loss than seek gain (and I reckon the most powerful principle for businesses to understand and use).
It pains us to pay for extras we don’t use as it feels like we’ve wasted money. Sure, a voucher would be nice, but give me a way to stop throwing money away and you have my attention.
In phrasing their offer in this way ahm have created a sense of painfor their prospective customers (you’re wasting money on stuff you don’t use) and a way to resolve it. Nicely done.
So thinking about what you do, what pain might your customers have that you can resolve? Me, I know that getting customers to do stuff is hard so I make it easy. I know that most websites are leaking conversions so I fix them. Drop me a line and tell me what you do and, most importantly, how you communicate that to your customers.
For more on Loss Aversion, check out tip #1 in this article.
Bri Williams runs People Patterns, a consultancy specialising in the application of behavioural economics to everyday business issues.