Preaching To The Choir: Losses Are Harder To Recover

One Way to Dig Out of a Hole - WSJ.com: "If an investment declines 10%, it takes about an 11% gain to break even (assuming you don't pump in additional dollars). If the drop is 20%, you need a 25% gain to recover. A fall of one-third requires a rebound of 50%. And if your investment falls by half, 'you need a double,' or a 100% return, says Mr. Wiener, the New York-based editor of the Independent Adviser for Vanguard Investors. The recovery percentages grow exponentially because you have so few dollars working for you after a big loss."

This is the basic idea behind Nassim Taleb's Black Swan Theory. However, human nature is not wired to think about percentage gains and losses. One of the key areas performance measurement professionals can add value to the marketing process is working with the sales team to help them clearly demonstrate this.