Do you suffer from sunk cost fallacy?
I missed this last year when Marte Cliff posted it, but am so glad I found it today. Cutting our losses, financial, emotional, time spent, etc. is important to do. It's easy to find yourself continuing to buy in to a lost cause.
Chances are, you either suffer from sunk cost fallacy right now, or you have at some time.
What the heck is it?
Sunk cost fallacy is a debilitating condition that causes you to throw good money after bad.
You know you have it when you…
Keep advertising a listing owned by people who:
• Refuse to clean the house
• Refuse to list anywhere near fair market value
• Refuse to negotiate AT ALL when you bring an offer
• Refuse to leave and let the house be shown without interference
• Refuse to allow showings except at specified timesKeep driving all over the county with buyers who haven’t even bothered to become pre-approved for a loan.
You also know you have it when you keep paying for leads when none of that company’s leads have resulted in “real” clients for the past six months. You do so out of a misguided belief that if you just hold on a little longer, you’ll get a good return on the money already spent.
Sunk cost fallacy can also cause you to sabotage your own marketing efforts by continuing to use marketing materials that don’t produce results.
You know you have it if you keep mailing the same letter, postcard, brochure, or flier that hasn’t ever produced a lead.
It’s also evident when you go ahead and use a graphic design, a marketing letter, or even an entire website that you know isn’t up to par – just because you already paid for it.
This condition isn’t just for business – it can show up in more personal ways.
You have it when, for instance, you keep wearing a pair of shoes that hurt your feet, or a shirt whose color makes your face look sallow.
Sunk cost fallacy comes about when you’ve spent so much time and money on a client or a marketing method – or a pair of shoes – that you can’t stand to give up.
What is the cure for this expensive condition?
Take a close look at what you’re doing, and be realistic. If that client is probably never going to get to closing, or if you’re going to end up making minimum wage, bow out.Remember that people like that don’t just cost money. They’re a drain on your emotions and your mental state, and that can hurt you both at work and at home.
If that marketing method isn’t bringing you results after several months – make positive changes.
Have your marketing messages re-written, buy new and better prospecting letters, hire a new website developer, or spend the time to make the changes yourself.
If the leads you buy aren’t bringing you business, look first at how you’re marketing to them. If the same marketing produces leads from other sources, then you’ll know its the leads that aren’t good – so stop buying!
One more thing…
Sunk cost fallacy can apply to time as well as money. Be careful!
Clutter Image courtesy of Bill Longshaw at FreeDigitalPhotos.net
chasing money Image courtesy of Sira Anamwong at FreeDigitalPhotos.netThis post first appeared at https://copybymarte.com/do-you-suffer-from-sunk-cost-fallacy/
marte@copybymarte.com
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208-448-1479
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