Using loss aversion, and Bullseye, to build a business case for an employer brand

UK television in the 1980s and early 1990s was dominated by one programme - Bullseye.

This magnificent Saturday evening gameshow saw contestants compete in a combination spelling bee/general knowledge/darts competition all in the hope of winning such illustrious prizes as a microwave, a lawnmower, or a set of golf clubs. It was brilliant to watch and as with many shows gameshows of the era it was the catchphrases employed by the presenter, Jim Bowen, that made it so memorable.

“Look what you could’ve won!” was the immortal, much-parodied, line uttered by the presenter Bowen, a proud Lancastrian, which always followed a contestant’s failure at the final dartboard hurdle. Once humiliation at the oche had been complete, the show's production staff, barely hiding their glee, would wheel onto the set a fancy car or, hilariously, a speedboat - not much use to those contestants hailing from landlocked towns such as Sheffield or Leeds!

This cruel act of showing the crushed contestant what they had missed out on, or lost, is an unusual tactic which can in fact be applied by brand marketers today when trying to make a case for an employer brand. Bear with me.

Losses loom larger than gains

Loss aversion is a cognitive bias that suggests the pain of losing is psychologically twice as powerful as the pleasure of gaining. It can prevent individuals and organisations from making riskier decisions or spending choices to address complex challenges.

Now, it is accepted fact that organisations who decide to roll-out a robust and well-thought out employer brand benefit from an increased talent pool, a more engaged workforce and lower employee turnover.

Loss aversion is a cognitive bias that suggests the pain of losing is psychologically twice as powerful as the pleasure of gaining.

However, it can be quite hard to quantify those benefits. Instead, today’s brand marketers who want to build a business case for embarking on an employer brand exercise should take a leaf out of Jim Bowen’s book and harness the power of loss aversion.

The concept can be an effective tool to use when building a business case for implementing an employer brand as you're highlighting the real cost. This is key as budget holders don't necessary care about the cultural risk of not doing anything. Why should they care about propositions or supporting narratives? However, you're guaranteed to get their attention by employing a loss aversion approach and laying out the debilitating costs, or losses, associated with the status quo.

Compare and contrast

For example, if a positive employer brand reduces staff turnover by 28%, then consider the cost of recruitment. There are recruitment fees, commission, and paid advertising. Not to mention the time (which equals money) taken to find the right candidate.

In addition, organisations with a poor employer brand are also often faced with having to pay more in salaries and other financial benefits in order to keep their talent.

A Harvard Business Review study found that a company with 10,000 employees could be spending as much as ￡5.45 million in additional wages to make up for a poor reputation. 

￡5.45 million!

And Virgin Media once surveyed its rejected applicants to find that 18% percent were customers, 6% of whom switched to a competitor due to a poor candidate experience. This drop in advocacy cost Virgin ￡4.4 million pounds in lost revenue.

￡4.4 million!

Compare that with the cost of using a crack brand purpose consultancy and content agency to create and implement an engaging employer brand and there will always only be one winner.

So, when you're next feeling anxious about building a business case for an employer brand then employ a loss aversion tactic and you're almost always guaranteed to hit the bullseye. I just can't guarantee a speedboat...

***

Read our latest manifesto for a peek behind the curtain as to how Rationale approach an employer brand challenge. Or sign up here for our latest insights.