Speak to Shantotto, who asks a question. Choose the second option, "Ask if you're worthy."
Shantotto then asks another question; choose the second option, "Whatchu talkin' 'bout Shantotto?"
Shantotto bestows you with the title "Total Loser" if you choose the first option, "Yes mommy" instead of the second option. If you do not choose this option, however, you can still get the title at the title-changing NPC after the quest has been completed.
The title "Total Loser" is not necessary for this quest. Choosing the second option on the first question is, however. It is possible to get the title without activating the quest.