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Status seeking is a part of human nature and can be harnessed for good or ill. Learning to recognize status-motivated behavior — in yourself and in other people — will help you understand why people tend to act in certain predictable ways, help you avoid common pitfalls, and improve your ability make wise decisions.
Value can’t be created without understanding what people want (market research). Attracting customers first requires getting their attention, then making them interested (marketing). In order to close a sale, people must trust your ability to deliver on what’s promised (value delivery and operations). Customer satisfaction depends on exceeding the customer’s expectations (customer service). Profit sufficiency requires bringing in more money than is spent (finance).
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Loss Aversion is the idea that people hate to lose things more than they like to gain them. There are very few relationships that psychology is able to quantify, but this is one of them: people respond twice as strongly to potential loss as they do to the opportunity of an equivalent gain. If you look at your investment portfolio and notice that it’s increased by 100 percent, you’ll feel pretty good. If you notice that your portfolio went down 100 percent, you’ll feel horrible.