The idea
Kahneman and Tversky (1979) described four features: outcomes are judged from a reference point, losses loom larger than gains, sensitivity diminishes as amounts grow, and small probabilities are overweighted. A 2024 meta-analysis of 607 estimates found average loss aversion of about 1.96, with wide variation and smaller figures in risky choices.
Use it thoughtfully
- Present price changes relative to the last price paid.
- Avoid taking away benefits customers already have.
- Split gains, combine losses (see C1.2).
An example
ILLUSTRATIVE EXAMPLE: A price rise from Rp 45,000 to Rp 50,000 feels like a loss even though Rp 50,000 is fair value, so the team pairs it with a clearly bigger benefit.
A question to try
What is your customers' reference price for your main pack, and when did it last change?
A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.