Nov 29, 2022
Today’s episode is all about the
pain of paying. This episode originally aired as number 59 in
August of 2019. It was formed from a paper I had found and
researched before I started doing interviews on the show. I had
never met or really considered connecting with the author of the
main paper I reference in the episode, Ofer Zellermayer (this paper
was his doctoral dissertation). In addition to having an episode on
this, I included a full chapter on the pain of paying in my first
book, What Your Customer
Wants and Can't Tell You which came out in May 2021.
Well, funny enough, in October
of that same year, he reached out to me! He said that he had gone
to search something related to his paper and found the podcast
episode so he dropped everything to listen! He approved of it
(phew!) and reached out to connect, which is such an awesome thing.
I’m always amazed at the power of the podcast and all the
relationships and connections that have come from it over the
years. Remember what I said last week in episode 238 about
reciprocity? Business is a long game, give freely and you will be
amazed at how great things can be.
Anyway, you may be wondering why
I chose this episode for today’s refresh. For one, with the
holidays upon us and just finishing up Black Friday, Small Business
Saturday, and Cyber Monday here in the states, it felt like a great
time to talk about the pain of paying. Buying things can feel like
physical pain, and it is important to know that, but not go too
over the top to compensate for it. Deals and discounts abound this
time of year, and people buy differently when they are shopping for
gifts. It is all interesting stuff to keep in mind as you consider
your own buying this holiday, and any sales you may be running for
your business. It felt like the perfect time to refresh this
episode for you.
Show Notes:
- [00:38] Today’s episode is all
about the pain of paying.
- [02:57] Buying things can feel
like physical pain, and it is important to know that, but not go
too over the top to compensate for it. Deals and discounts abound
this time of year, and people buy differently when they are
shopping for gifts.
- [04:21] Buying things isn’t all
fun and games and the process of paying for things can actually
cause pain for many people.
- [06:14] Everyone experiences
some level of pain of payment in various scenarios and those
conditions tend to be pretty universal. Context is incredibly
important when it comes to the pain felt making a
payment.
- [07:09] Melina shares the
reasons and continuums that impact the pain felt in a
payment.
- [09:30] The brain loves a
story. This story can impact the pain felt by paying.
- [12:28] Price is not about
price. Everything that comes before the price matters much more
than the price itself.
- [13:57] When the pain of paying
is too much, people who don’t buy things that they need or want
because it is too difficult to give up money are called tightwads.
Those who spend too much too easily and do not feel an appropriate
amount of pain before or during the spending process are called
spendthrifts.
- [16:58] Being a tightwad is
different than being frugal. Frugality is rooted in joy when saying
money.
- [19:16] 60% of people are
unconflicted, 25% are tightwads, and 15% are spendthrifts. Your
biggest challenge is overcoming the 25% who are
tightwads.
- [20:08] Tightwads are most
sensitive to framing adjustments so that is where you can make a
difference. Tightwads can have a difficult time paying for things
with cash so make it easy to pay with a credit card.
- [22:17] The pain was found to
have less of an impact when buying what is considered virtue
products than vice products. It is important to know what category
your product falls into when you are looking at how to frame your
message.
- [23:46] One of the big issues
for spendthrifts is that they do not account for or intuitively
understand the opportunity cost at the moment when they are getting
ready to buy or they want to buy things.
- [25:52] Everyone will feel some
sort of pain when paying. It is your job as the person selling to
figure out what the buyer needs, what would benefit them the most,
and then present it to them in a way that will have the last pain
felt so they can actually enjoy spending the
money.
- [27:39] For your business,
think about how people interpret what they are getting. If it was
not their choice are there some other areas where you can help them
feel like they did make a choice so there is less pain felt in the
experience?
- [31:26] When the pain of paying
isn’t felt as much it doesn’t impact the experience as
negatively.
- [33:51] In some ways, you are
making the loss and pain much more prevalent, reducing usage by
consumers, and impacting the overall
experience.
- [35:29] The payment that is
triggering pain doesn’t have to be from money, it can be time as
well.
- [37:36] When consumption and
payment are coupled together, you experience pain as you consume,
it has a certain level of pain and joy associated. When you
uncouple them, you experience each item separately which can
increase each unless you implement them properly.
- [40:03] The pain of payment can
be removed when the payment is taken care of before
consumption.
- [42:12] “Strong buffering and
hence reduced the pain of paying occurs when the consumer can
directly connect the costs in terms of money with the benefits in
terms of product or service. The ability to associate costs and
benefits is just as important in physical pain.”
- [44:26] The pain of paying was
potentially completely eliminated when it was given as a
gift.
- [45:06] Melina’s closing
thoughts
- [45:26] The fact that we think
about gifts differently than something we need — and that we want
to spend LESS on the things we functionally NEED is so
interesting.
Thanks for listening. Don’t
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