How to use Loss Aversion psychology in your Facebook advertising 👀

As a Facebook advertising specialist, I’ve witnessed firsthand the incredible impact that psychological principles can have on the success of marketing efforts. One such principle that continuously wins the sale over and over again is ‘Loss Aversion.’ This powerful psychological phenomenon taps into our innate fear of loss, making it a compelling strategy to drive conversions and boost sales.

In this blog, we’ll explore the concept of loss aversion together, whilst providing real-life examples to illustrate its potency. To finish, we’ll delve into 5 effective ways that you can apply this principle to your Facebook advertising campaigns.

But before we dive in, I want you to imagine this…

You have just arrived to do your weekly food shop. You rush out the car before rushing back to get the bags that you’ve forgotten. You put your phone, keys, purse along with a rogue £20 in your pocket before zooming in to do your shop. 

After running round the aisles like a headless chicken, you have a battle with the self service checkout before heading back to the car, only to realise…

You’ve lost that £20. It’s gone. Gone forever 😭

How do you feel?

Now imagine that in comparison to this.

You have just finished your weekly shop and as you are rushing to your car to unpack the bags into your boot – you find a rogue £20 on the carpark floor. Bingo! If you keep it (that’s a moral question for another day) – how do you feel?

Does losing £20 elicit a stronger feeling in comparison to gaining £20?

Probably. Because our brains are HARDWIRED to avoid loss, with studies showing loss aversion to be 2x as powerful as the gain of something, especially when used with urgency.

The principle of ‘Loss aversion’, is a cognitive bias and it was discovered by psychologists Amos Tversky and Daniel Kahneman. Loss Aversion centers around the idea that people are more motivated by avoiding losses than they are by achieving gains. In simple terms, the pain of losing something is felt more acutely than the pleasure of gaining something of equal value.

Loss Aversion in action:

  1. Limited-Time Offers: Businesses often use limited-time offers to leverage loss aversion. Phrases like “Only 24 hours left” or “Limited stock available” create a sense of urgency, compelling customers to take immediate action to avoid the potential loss of a great deal.
  2. Free Trials and Money-Back Guarantees: Subscription-based businesses frequently offer free trials or money-back guarantees to ease customers’ fear of committing to a service. The idea is that potential customers would rather try a product risk-free than miss out on the opportunity to benefit from it.
  3. Abandoned Cart Emails: Loss aversion can be seen in abandoned cart emails as we remind customers of the items they have left behind and the potential of missing out on the products they were interested in.

How can you apply the Loss Aversion principle to your Facebook advertising:

  1. Limited stock announcements: Highlight scarcity in your Facebook ad copy by emphasising limited stock availability. For instance, “Only a few left in stock – Don’t miss out!” or ‘Each item is completely unique, so once it’s gone, it’s really gone!”
  2. Time-sensitive promotions: Create a sense of urgency with time-limited offers and countdowns, encouraging users to act swiftly to secure the deal.
  3. Exclusive access: Offer exclusive access to products for a limited number of customers (eg subscribers), tapping into the fear of missing out.
  4. Upsell with Loss Aversion: Showcase the potential loss of not upgrading to a premium version of your product or missing out on additional features. This works well with bundles as well – offer them a bundle of your products highlighting the saving they could make.
  5. Retargeting with incentives: Employ retargeting ads with personalised incentives to win back customers who showed initial interest but did not convert. Remind them of what they stand to lose by not completing their purchase. E.g retargeting customers who have added to their cart with a discount code or free gift.

Seizing the power of Loss Aversion

By leveraging loss aversion, you can strategically enhance your Facebook advertising efforts to drive higher conversions and increase customer engagement.

90% of our purchasing decisions are based on emotions not on logic. So by appealing to our customers emotions using loss aversion, there is the opportunity to resonate with our customers on a much deeper level, turning them from one time buyers to loyal fans.


I know from experience that loss aversion and urgency make a powerful combination, but don’t overuse it.

While they will be great for Q4, they are not sustainable as a stand-alone marketing strategy. If you constantly offer “limited time only” sales, people will catch on and only purchase during sales. Or worse, a constant deluge of “limited time” offers and “exclusive” deals will make customers feel lied to and manipulated.

Use these tactics with restraint for maximum impact.

So there you have it! How you can apply Loss Aversion to your business and Facebook advertising efforts. Fancy learning about the IKEA Effect whilst you’re here? Head over to this quick read to take a look.

If you have any questions or would like to talk further, please send me a message on Instagram (I love to hang out there) or book a free call with me here.

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By downloading my guide, you agree to receiving an occasional newsletter that details helpful tips and tricks. I promise not to spam you and you can unsubscribe at ANY time! I will never sell your details to third parties and will guard it with my life.