Awhile back we talked about the persistence effect and how, despite the fact that it is a very old school marketing phenomenon, it still applies in the world of social media.

Today, we’re tackling another old school concept that might be preventing you from being a remarkable business: prospect theory.

What is Prospect Theory?

There are lots of ways that prospect theory has been defined, but here’s the two main concepts I think:

• it isn’t so much a problem that we are afraid of uncertainty (not knowing what lies ahead), but the problem is that we are afraid of losing
• it is difficult for us to see how things can be better in the future by changing, but it is easy for us to see how things can be worse in the future by changing

In other words:  we hate losing so much that we avoid anything that has even a remote risk of failing

Interesting concept, eh?  But it’s true, and been proven true over and over again in tests and studies.  It’s just how us human beings are wired up, unfortunately.

Why It’s Ok to be Scared of Uncertainty

It’s ok to be scared of social media, search optimization, and all of the other internet concepts.  Things have evolved and are changing very rapidly, so for a small business owner who has a lot of worries and concerns already, this isn’t welcome news.

Business owners need to be pragmatic anyhow.  We don’t have massive budgets, and we don’t have lots of staff, so errors can be difficult to correct.  Too many risks going bad all it once could sink the business.  So risk is a serious matter in a small business.  That’s why it is ok to be scared about uncertainty – if you’re pushing your business as far as you can, it will be a little scary.

Making it Easier – Losing Isn’t So Bad

Being scared, though, isn’t a good enough reason to stop your online efforts in their tracks.  This technology is such a massive shift in the way we communicate, you just cannot ignore it, since it is a platform that benefits you directly and provides you an advantage against larger competitors.  In fact, if you do nothing, in a way, you might lose.

So, how to make things easier to not be so scared?

• Get Educated to Remove Uncertainty: If you’re reading this, you’re off to a good start.  The more knowledge you have about what’s happening, the better decisions you can make.  Careful for information overload, and make sure that you’re using solid information that you understand.  (Hint:  the TOP do it yourself guides are a good place to start.)
• Give Yourself the Time to Experiment and Remove Uncertainty:  If winter is your busy season, now’s probably not the time to go launch a new marketing campaign or start bombarding Twitter with news and updates.  Wait until the spring and then spend the time and money.  Sure – you might be missing opportunities, so don’t wait forever, but wait until the time is right.
• Be Prepared to Adjust as you go: Get feedback, monitor, react.  When doing business online, its easy to shift mid-stream.  Getting more traction on Facebook than Twitter maybe?  Figure out why or ask people.  Give things time to work, but don’t be afraid to shift direction where/when it suits.
• Put a realistic hat on:  Be honest with yourself – how likely are you to fail?  And if you did, what’s the worst thing that would  happen?  In most cases, you might have lost some time, but not a lot.

To Learn More

Want to stop being afraid and plan some successful ways to market your business online?  Check out the TOP guide Just What Works:  33 Fun and Effective Ways to Promote Your Travel Business Online.

If you’re not sure what you’re afraid of, then try out free, no-obligation small business assessment.

Photo by capture queen