Fear and Greed in Marketing: What Drives Human Behavior?

Fear & Greed

Fear and greed are two of the three great forces in the world, according to Einstein (the third is stupidity).

They’re also two triggers that not only stock markets (in the form of the Fear & Greed index), but also marketers and copywriters have been well aware of for years.

That’s because they are powerful emotions that, when used properly, drive people to take action.

Fear and greed also play a role in the customer’s behavior when they visit your site. As such, they shoudl be taken into account when optimizing a site.

After all, the purpose of conversion optimization is to drive action—to influence prospects to click “buy.” So how can we use fear and greed to make more money? Is it possible to do so ethically? Is it even effective anymore?

What is the Fear vs. Greed Index?

The Fear and Greed Index is an measurement of the emotions that stock investors are displaying with their actions: fear is associated to a slow momentum in the market, which usually results in lower share prices. Greed, on the other hand, refers to markets with high momentums and prices that end up rising.

Fear and greed are considered to be the two general forces that guide financial markets. You’re definitely aware of that Warren Buffett saying (or some variation of it), “Be fearful when others are greedy and greedy when others are fearful.”

Financial markets are driven by two powerful emotions—greed and fear.

– old Wall Street saying

Basically, it’s common intuition that in a fearful market, people are looking to irrationally sell stock and in a greedy market people are looking to buy. The wise ones try to go against the grain and do the opposite, and as the saying goes, “buy low and sell high.”

Fear and greed have their place in financial bubbles as well, where, as changingminds.org put it, “prices go up sharply as people compete to buy a relatively scarce resource.” They give the following explanation:

In a normal purchase situation, if you buy something today it is worth about the same tomorrow, yet when prices are rapidly going up, it seems that if you buy them now, you are guaranteed a quick return when you sell them in the short to medium term.

Based on the assumption that tomorrow will be much like yesterday, people become greedy as they seek the easy win of ‘something for nothing.’

They also fear being left behind as prices rise beyond their financial reach. Bubbles are also driven by anticipated regret as we feel in the present a sense of the the future regret of not buying now.

Today, you can check out any one of many fear and greed indexes that purport to help you make smarter decisions.

Fear and greed also have a long history in persuasion. Fear, especially, has been studied as a communication device for decades. There’s empirical support for its effectiveness in driving behavioral and attitudinal change.

When fear drives conversions

You clearly don’t want to inspire fear in your customers about your product. What works, then, is inspiring fear at the prospect of not having your product.

This is more common than would make you comfortable, but when you think about it, many industries use this tactic. From home security systems to baby monitors to insurance—especially insurance—marketers have been using fear as a tactic for a long time.

Here’s an example Peep shared when shopping for plane tickets:

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Why does fear work?

Fear is a powerful motivator. The last 50 years of empirical research on fear-arousing messaging has shown evidence that high fear messages are generally more effective than low fear messages in changing people’s actions, intentions, and attitudes.

It’s a deep evolutionary characteristic in humans that triggers us to avoid potentially dangerous stimuli. In the modern environment, too, a “fear appeal” posits the risks of using and not using a specific product, service, or idea such that if you don’t “buy,” some particular dire consequences will occur. Here’s an example where United Agencies West split tested email subject lines:

The first subject line, about $20,000,000 homes burned to the ground, increased leads by 65% for the insurer. That result makes a lot of sense—if million-dollar mansions aren’t safe, prospects realized their home probably isn’t safe either. That’s a strong motivation to protect themselves from potential damage.

Generally, academic literature isn’t entirely conclusive on fear’s effectiveness, but it generally agrees that more effective fear appeals result from a higher fear arousal followed by consequences and recommendations to reduce the negativity. In other words, it needs to be scary enough to the person to result in action, and you need to guide them to action (with a call to action or something they can do to assuage the fear).

Outside of academia, even, doesn’t it make intuitive sense? Dating back to Aristotle and continuing today, it has been widely recognized that pain and pleasure are critical motivators.

We’re driven towards things that give us pleasure and avoid that which gives us pain. Even so, you don’t necessarily have to cause pain to create fear. Here’s how changingminds.org put it:

The human frontal cortex has a primary function in thinking about the future. We are quite skilled at imagining what might happen and experiencing anticipatory emotions. This has proved helpful in our evolution, but it can also cause problems as anticipated fear of things that may not happen cause us stress and allow others to persuade us.

The most common use case today for fear appeals seems to be in PSAs that attempt to deter people from engaging in dangerous behaviors. One of the most famous examples of all time is the “your brain on drugs” commercial…

How to use fear to convert

Bart Schutz of Online Dialogue listed tips for using fear on his Wheel of Persuasion site:

  • Use personally relevant threats (not too small, nor too big).
  • Make sure you directly boost your customer’s efficacy, by convincingly offering your solution as easy and effective.
  • Provide a clear and strong call to action directly after or next to your scaring message.

Don’t forget, when your customer responds or takes action, to make them feel good again by reassuring them they took a step towards a better life.

Personally relevant threats

Of course, fear is contextual. Research supports this—if you feel vulnerable to a threat, you’re more likely to be nudged toward a desired action. As Natascha de Hoog described about the study, “these individuals adjusted their beliefs about the effectiveness of the protective action and were trying to persuade themselves that they should engage in the recommendation to eliminate their risk.”

Another section in the same paper found similar results:

Vulnerable respondents presented with a message depicting severe health consequences experienced more negative emotions and perceived the consequences as more threatening than non-vulnerable respondents. In addition, vulnerable respondents had more positive thoughts about the action recommendation, regardless of argument quality and response costs.

Vulnerability isn’t easy to predict, so personally relevant threats aren’t always as easy as knowing your target audience. For example, smokers are aware of the dangers of smoking but generally make excuses, because of cognitive dissonance, that lower their own perceived risk.

Still, honing in on people’s vulnerabilities has been a common tactic for years. A classic example…

Promote customer’s efficacy

Once you’ve chosen a fear appeal that is both high-arousal and targeted, you need to convince your customers they can actually do something about it. Otherwise, the fear appeal, instead of driving action, will drive paralysis.

According to the Wheel of Persuasion, the most important ingredient in an effective fear appeal campaign is ‘perceived efficacy.’ As the article says, “perceived efficacy is a combination of both self-efficacy (“can I avert the threat myself?”) and response-efficacy (“will the action recommended indeed avert the threat?”).”

For example, this fear appeal calls for the viewers to wear a helmet—something easily implementable:

If your message is sufficiently scary and seems easy enough to avoid, then you simply need to give your viewers a call to action, or a way to assuage the fear (usually with your product or solution)…

Provide a call to action (assuage the fear)

The less friction users have on the path to assuaging their fears, the more likely they are to commit the desired action. So make it clear and easy to take action. Here’s how BetterChange put it:

Make it easy for people to follow up on your recommendation. Put your call-to-action right next to the fear appeal, so that when you scare them, they immediately hit the “I want to insure” button. Also, be sure to tell them how effective your solution is when they hit the button! “Our insurance covers all you need as a car owner so you don’t have to worry about it anymore!”

In practice, this doesn’t always look as dramatic as scary anti-smoking ads. It could simply be making visitors aware of the negative consequences of missing out (scarcity) and providing a way for them to avoid those consequences (buy now, or ship before Christmas):

The example of Amazon using scarcity with low stock messages.

Often, you don’t need to (and maybe shouldn’t) manufacture any fearful elements. Simply understand that your customer has their own internal fears when they land on your page, and if you can design elements to assuage that fear, you’re more likely to convert them.

At the other side of fear, traditionally is greed (or some would call it hope)…

How does greed drive action?

Greed is the second emotion included in old Wall Street quotes and advice. Perhaps it is even more famous, mainly because of the iconic Gordon Gekko speech..

Greed also has its history in financial market psychology. Wikipedia gives the impact on financial bubbles as an example:

The Dot-com bubble, also knowns as Internet bubble, referenced the speculative investment bubble that was created around new internet startup companies between the years 1995-2000. In that time, exorbitant prices of new Internet companies motivated investors to invest into companies whose business plans included a “dot com” domain. Investors becomes greedy, creating further greed, resulting in securities being heavily overpriced, which eventually created a bubble.

Something for nothing: the power of free

Much of the emotional power of greed comes from a form of hope, where the expected reward far exceeds the expected time and cost to be invested. In the real world, this manifests itself in many ways, such as gambling, get-rich-quick schemes, and other forms of selling.

In conversion optimization, this often takes the form of offering things for “free.” Now, free is by no means a silver bullet (we wrote a whole article on that), but there are some times when it is effective. Here’s the executive summary on using ‘free’ to convert:

  • Sometimes it works, sometimes it doesn’t. There are case studies that support both sides.
  • Free trials and freemium products have proven to be effective acquisition tactics.
  • “Free” tends to attract tire kickers and often converts in the short term (without strong lifetime value).
  • There is certainly academic support to the irrational sway that free things have on people’s decision making. The key is to figure out when and how to execute.

Get-rich-quick and the darker side of greed selling

Here’s how changingminds.org explained greed:

It typically involves making the other person believe that they are getting an incredible bargain (often without your apparent knowledge). Of course, they don’t get what they had hoped for, but they will do a great deal for you if they think you can give them something for virtually nothing.

So you can see the potential for darker use cases, right? The most common manifestation of ethically challenged use cases for greed is, at least in popular culture, the confidence trick (“con”).

Confidence men make use of both fear and greed. They usually start with greed by tempting people with what seems like a certain asymmetric gain (they gain more than they invest in time or money). They’ll usually let you gain small amounts to prove the system works.

Then they’ll lay hints that the system isn’t strictly ‘legal’ but there’s no chance of getting caught—this leaves you, after you find out you’ve been duped, unable to go to the police.

Pyramid schemes work on a similar model, where the money from new investors is used to pay off existing investors, thus sustaining the illusion of a working system.

Finally, you’ll see this type of a fear/greed appeal in scammy sales letter usually selling get rich products. Here’s an example I found from a Google search:

Screen Shot 2016-02-08 at 1.45.35 PM

Note that I’m from Austin, Texas, so I should be suckered in right away knowing that a Texas mom is making $8k extra a month in her spare time. This is probably to get my greed/hope triggered. If she can do it, I can too, right? (Also, I love the “no scam” in the headline. Nice touch.)

Of course the copy is filled with greed appeals. But they make sure to sprinkle in some fear appeals, mainly through scarcity measures:

Screen Shot 2016-02-08 at 1.45.29 PM

Is this a short term strategy?

So sure, some scammy companies use these tactics to make some sales. But as we’ve seen there is also some empirical research supporting the effectiveness of fear and greed. Still, not everyone agrees this is a sustainable strategy for most companies. Famous copywriter Mark Ford (pen name: Michael Masterson) has this to say:

Mark Ford:

“About six months ago, I had a conversation with a copywriter who’d had amazing success with several fear-and-greed promotions. In fact, his commissions on all the sales from those campaigns should have come to more than a million dollars. I say “should have,” because his clients discovered that many of the buyers brought in by his fear-and-greed promotions asked for refunds. And those that stayed were not good buyers of their other products…

…Sure, using fear sometimes seemed necessary—to keep the kids from riding their bikes in the dark without headlights, for example. But mostly it paralyzed the person I wanted to motivate. I found it to be both heavy-handed and clumsy. There were many other emotions and desires I could stimulate that would get the job done.

And greed? I grew up in a household where greed was considered a deadly sin—“the devil’s instrument.” I had no desire to use it as my own.

I wanted to build my career by working with, and selling to, people who, like me, were subject to greed and fear but wanted to rise above those base impulses.”

From what I’ve noticed, the best fear campaigns are aimed at avoiding dangerous behaviors, like smoking. Otherwise, a subtle use of fear (otherwise known as scarcity, which I honestly don’t think is really fear inducing), has clearly shown to be effective in many cases.

Blatant, clumsy attempts at triggering fear and greed seem to work only on unsophisticated buyers or those that are looking for deals, short term gain, or something that doesn’t exist (easy riches or happiness).


While fear and greed have a romantic connotation that conjures images of Wall Street wisdom, Gordon Gekko, and classic ads, there is a wide world of emotion outside of these broad categories that you can use to persuade buyers.

It certainly helps to know the power of fear and greed, especially on an academic level, to pepper them into appropriate campaigns. Especially if you’re in an industry where there is a level of natural internal fear in your customers (security systems), learning how to evoke that in a respectful way on your site can help propel conversions.

However, there are many, many use cases that aren’t so benevolent. Fear and greed are traditionally irrational emotions that override rational decision making, and they’re often used in confidence scams or get rich schemes. Still then, it’s important to know their power, if only to avoid those attempts yourself.

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  1. Thanks Alex — I really enjoyed this post.

    Primal human emotions and neuromarketing, a great mix.

  2. Hi Alex,
    I must say that this is really a very good post. I really like the way you have described each and every aspect, giving relevant and straightforward examples. This is really interesting to read and analyze what actually drives human behavior. Today, we can see several types of online marketing campaigns, which target our emotions and thinking ability to turn prospects into customers. However, I think human greed plays a major role in our behavior and decisions.

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Fear and Greed in Marketing: What Drives Human Behavior?