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Fear Factors

Push people's panic buttons with these techniques for an alarmingly effective ad.

This story appears in the July 2002 issue of Entrepreneur. Subscribe »

I can't remember the last time I admired an ad by an investment firm as much as I do the one featured here. Developed by mutual fund behemoth The Vanguard Group of Valley Forge, Pennsylvania, it's as powerful and motivating a sales message as you'll find in the world of wealth-building today. Let's talk about what makes the ad so good and what you can learn from it to improve your own efforts.

You should know that the company's reputation is based on charging a very low expense ratio-the fee charged to manage an investor's money in a given fund. The point of the ad is to stress how that ratio size can affect an investment's performance beyond the ups and downs the stock market brings, especially if you are paying higher-than-Vanguard fees. The company could have pulled that off in any number of ways, but they chose a motivational "button" that jerks us to attention: the fear of loss.

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