Why There’s No News Like Bad News

Two boxes: inside one, is a gift voucher for $50 at a nice restaurant. Inside the other, is a lottery ticket with a chance of winning $50 million.

Which do you choose?

In fact, a better question: how could you NOT know which to choose?

Sure, you could win $50 million.  But what are the odds? Almost exactly 1 in 138 million, if you’re playing the Euromillions, or 1 in 292 million if you’re playing the Powerball.  And yet you’re still mentally naming all the genetically-engineered dinosaurs in your new theme park and adjusting the cufflinks on your tuxedo at the Grammys.

Spoiler alert: it probably won’t happen. And yet, you can’t help thinking, “still worth a go”. What’s going on?

Even though the prospect of a guaranteed meal out is tempting, and your brain is doing a fair job at processing the immediate reward of opening the restaurant box, it’s your pesky little emotions tugging at you to open the lottery box.

And it’s not like you don’t already know the odds aren’t in your favour.  Getting struck by lightning, for comparison,  is only a one in a million chance, and becoming an astronaut is a 1 in 12 million chance – which seems relatively likely, as long as you don’t get car sick easily.

So why are we consistently drawn to bigger odds and bigger prizes, despite the odds of winning them being incredibly remote?

The answer: neglect of probability.

In a classic psychological experiment from 1972, participants were split into two groups. Group 1 was told they would receive a small electric shock. Group 2 were told they had a 50% chance of receiving the same shock. The researchers measured symptoms of physical anxiety such as sweating, heart rate, et cetera, just before the shock was administered.

Guess who was less nervous?

Nobody. Turns out, knowing you have just a chance of experiencing something bad makes us just as anxious as a guarantee that bad thing will happen. But what came next was even more interesting.

Next, the researchers announced a series of reductions in the probability of the second group getting shocked: down to 20%, then 10% all the way down to just 5% – and there was still no change in the level of anxiety. People were just as worried about a smaller chance than a bigger chance.

But then they cranked up the voltage… and when the strength of the electric shock went up, anxiety levels rose in both groups by the same magnitude.

This demonstrates that we don’t always react to probability – or, rather, we tend to ignore it when we’re faced with emotional issues.

For example, there’s just a 1 in 11 million chance of dying in a plane crash. Air travel is exceptionally safe. But thanks to the devastatingly emotional media coverage, minute silences and sweeping declarations of reform that follow these isolated incidents, many people are still terrified of flying.

By the way, odds of becoming President of the United States are just 1 in 10 million. We’d vote for you.

So why is this so relevant for sales?

Because the bigger the magnitude of threat and the more emotional the topic, the less comfortable we are with even a small risk.

This is why financial newsletters do so well. It’s a market that can put a financial spin on any threat, terrestrial or existential – like oil running out, or being made to work into your 70’s – and make a high risk of not getting a return on your investment look infinitely more preferable than just sitting tight and waiting for it all to blow over… even though it probably will.

By focusing on marketing the worst-case scenarios, you’ll tap into your customer’s emotions, and that makes for far more effective selling.  It’s not something that’ll always work, but if you’re selling something designed to prevent or help a disaster – say insurance, fire extinguishers or template policy documents – it can be extremely powerful.

But, if you’re a little uncomfortable with selling bad news, probability neglect works great with a good old fashioned rags to riches story. Even though the odds are insurmountable, the fact that one person broke through and made it big, or achieved the impossible, makes people think, ‘why not me too?’

Probability neglect means we still use our mobile phones at the wheel, but consistently forget to update the batteries in our smoke alarms. It’s why we lobby against nuclear power plants in our neighbourhood in the morning and drive home drunk in the evening. It’s all to do with control. As long as we’re in the driver’s seat, we feel in charge of our own fate – even though the decisions we make aren’t always in anyone’s best interests.

But probability neglect isn’t all doom and radioactive winter. Without it, we wouldn’t have a thriving startup culture. You know that 8 out of 10 businesses fail within the first 18 months, right? But I bet you want to start one anyway, just because I said you couldn’t. Without a can-do attitude like yours, we wouldn’t have Virgin, Tesla, Facebook, or your favourite hipster coffee shop.

Lucky Lindy probably wouldn’t have flown across the Atlantic. Mount Everest would still be unclimbable. And, even if we do succumb to the odds and fail, that at least will teach us something more about the matter than if we sat in the pub and waited for it all to blow over.

But if you do win the Euromillions and build that dinosaur theme park, don’t forget to tell your lawyer to avoid the toilet made of reeds.