🤔 Did you know…
Would you rather have $20,000 in your pocket today or $100,000 in two years’ time?
Most people will pick $20,000 now. Seems weird right? But it’s because humans are hardwired to choose now over later.
And that default instinct can help you sell more stuff. Keep reading to find out how…
Life has put you through the wringer lately with one problem after another.
Just when you think you’re finally in the clear BOOM—heeeeeeeello new problem.
So you make an executive decision:
This Saturday night? You’re going out on the town.
You’ll let your hair down, dance the night away, and leave all your problems for another day.
There’s just one issue: your wardrobe is *not* looking good.
The 1980s called. They want their clothes back.
Determined (and a tad embarrassed) you hit the internet. After a cool 2 hours of searching you’ve found the *perfect* outfit.
Into the cart it goes.
You scan the delivery options:
- Arrives tomorrow — $5.99.
- Arrives Friday — free.
You don’t need it until Saturday but, for some reason, you find yourself $5.99 lighter.
Why have you just paid more for something to arrive earlier when you don’t need it yet?
In today’s edition of Why We Buy 🧠, we’ll explore Hyperbolic Discounting—why we choose immediate (and often smaller) rewards over those that come later.
Let’s get into it.
The Psychology of Hyperbolic Discounting 🧠
The human mind is a weird and wonderful thing. Sometimes—OK. A lot of times—logic goes out the window.
Hyperbolic Discounting is a fancy word for choosing small rewards now over larger rewards later.
This irrational human quirk was discovered by Richard Herrnstein in 1961. During his studies, Herrnsteine found people tend to take ‘time’ into account when making decisions.
He noticed something interesting: How quickly individuals would receive a reward impacted which reward they picked.
In a follow up study, George Ainslie found when given the choice of getting $50 now vs. $100 in 6 months, most people chose the immediate reward. But when offered $50 in 3 months or $100 in 9 months, people were willing to wait for the larger sum.
Logically, the decision is essentially the same/ People should choose the larger reward each time, yet most people will take less money to get an immediate reward.
Pretty odd, right?
Hyperbolic Discounting doesn’t just affect purchase decisions—it affects our day-to-day choices too.
If you’ve ever chosen to put off important work until “tomorrow” so you could binge Netflix today, you’ve fallen victim to Hyperbolic Discounting.
Inside Your Buyer’s Mind🧐
Buyers pay to save time.
Research shows buyers are willing to pay an average of 19% more for a service that is immediate. People want near instant results and they’re happy to pay more for it.
And 27% of buyers are likely to spend more with a brand that responds quickly to requests. Your buyers know time is money” and speedy customer service is rewarded.
So if you want your buyers to spend more, think about how you can deliver value faster and how you can respond quickly to impress.
How To Apply This 🤑Alright, so how can we apply this right now to sell more?
Make speedy service part of your brand
If you know time is money, you can make a business out of it.
What better example of a business makes out of time saving than Amazon Prime? Amazon even took ‘fast’ to new levels, somehow now offering same-day deliveries.
Sell convenience and then make it part of your brand DNA.
Media & Education
Stop selling information products and start selling outcomes
Many online educators and creators brag about how their online course includes 50+ hours of video lessons. As Katelyn shared with Nathan Barry on his podcast, we think that’s a BIG mistake.
People don’t just want to “learn”—they want to get a specific outcome, faster.
For instance, the fastest way to figure out how to improve your marketing is by gathering insight from real buyers. That’s why 1:1 interviews with customers (aka “Clarity Calls”) are so freaking valuable! 🤩
Many marketers and entrepreneurs want to conduct customer interviews… but put it off because it feels overwhelming. That’s why we created the Clarity Call Cheatsheets.
We don’t force customers to watch 10+ hours of video lessons before their first interview. The real learning comes from doing interviews and honing your skill over time, so we help people to skip the guesswork by providing a step-by-step system to follow.
Our customers love it, clearly 👇👇👇
Retail & Hospitality
Offer time-saving services customers want
In this go-go-go world, removing even a few minutes of wait time can be enough to get customers to choose your business over a competitor.
Starbucks was the first major coffee chain to offer pre-ordering via their app. The new service rolled out in 2019 and was an immediate success.
In our post-pandemic world, many businesses offer pre-ordering and same-day delivery. Look for unexpected ways to help customers save time to earn more repeat buyers.
Turn around quotes in less than 24 hours
Think about the last time you needed to hire a service provider for a home project…
Did you call ten people for only two to show up and only one to actually give you a quote (and it was off-the-charts)?
Well, you’re not alone.
If you are selling a service, the good news is the bar for delighting is preettttyyy low. If you can turn around quotes in a day, you’ll be more likely to land the customer and business will be booming.
The Short of It 💥
Customers value having things now.
Giving customers options to save time and get their hands on their purchase quicker than your competitors can lead to more business.
Remember: time is money.
Until next time, happy selling.
🐦 Your Brainy Tweetable
Offering discounts is often a crappy strategy.
Being cheaper is a race to the bottom. But studies show buyers will actually pay 19% MORE to get something sooner.
When you compete on speed—rather than on price—your business & your customer wins.
Wanna really get inside your buyer’s head?
When you’re ready, there are a few ways we can help: