Declan O'Flaherty

Are You A Victim Of The Sunk Cost Fallacy?

I’ve touched on this before in my emails; it’s important… so I’ll do it again here on the blog. Let’s say you pay $50 to see a play, or a movie, and half an hour in you’re not particularly happy with it, but feel that if you left half way through, you’ll be flushing $50 down the drain. So you stay. Here’s the kicker: the $50 you’ve spent should have absolutely no bearing on your decision to stay in the theater. After all, the money is gone regardless of what decision you make. And you know what? This happens quite a lot. In fact, the greater the investment we make initially, the greater the “sunk cost.” In my very first year online, I was promoting Amazon products on review websites using SEO. That whole year I made about $100 in total. I should have known after about 6 months that it was a dumb strategy to keep using. But I invested a lot of time, money and energy into building out my review sites, backlinking, writing content, advertising… whatever else… So it was very difficult to let it all go of that.

Looking back at it now, I realise how irrational I was being

My question to you is: Are you beating a dead horse; holding onto something that’s clearly not working, just because you’ve invested a lot of time, energy and effort into it? It’s important to look at this. Listen: The only performance that matters is… future performance, right? It’s irrational to see it any differently. But our irrationality is driven by our need for consistency. We find consistency more credible. After all, the alternative, is “contradiction.” Ditching a strategy half way through creates that contradiction – and that leads us to the realization that we once thought differently.

In a sense, it’s like admitting defeat, even if it’s only on an unconscious level

It’s there all the same though. The sunk cost fallacy may be at work if you say things like… “But I’ve put so much time into this project, I can’t drop it now” “I’ve come this far….” “This relationship is a disaster, but we’ve been together for 5 years, I can’t just give up on it now…” Just to be clear: There may be very good reasons to follow through and complete certain projects. Just make sure you’re doing it for the right reasons. How do you know if it’s time to drop something? When you make a decision, be sure you’re not making the decision based on how much time, energy and money you’ve put into the project… in the past. Your assessment of the future costs of time, energy and money is the ONLY thing you should be considering. Think about it. It’s also possible the current marketing strategy you’re using has legs, but somewhere a long the way you’ve gotten a little lost. That’s okay. Most people do. So, whether you need a fresh new start, or a new perspective… I’m confident you’ll find what you’re looking for in here, for free… Digital Profit Classroom Free Video Training Series If not my training, then someone elses. But just make sure you’re not losing the battle every time you sit down at your computer, by doing the things that have gotten you to this point right now. Only you will know if what you are doing, or have done up till this point, is worth more of your time going forward. Be honest with yourself. Do NOT underestimate the dangers in following tactics and strategies that, in the past, and up till this point, have lead to nothing. Many have fallen by the wayside. You’re either moving closer to success, or closer to failure. This industry changes rapidly, to think you’re standing still instead of going backwards, is lazy thinking at best. Don’t be the boiling frog. For more, and hopefully a new way out, go here next and sign up for my FREE 4-part video training series… Digital Profit Classroom Free Video Training Series Warmly, – Declan