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Imagine this…

You’re burnt out and in desperate need of a vacation.

The plan? Spend a week lying in the sun with a Pina Colada in one hand and a book in the other.

You have two options:

1. Get an Airbnb on the beach somewhere tropical
2. Go to an all-inclusive resort

The Airbnb would allow for more privacy and a bigger space. But, it also means you’ll have to grocery shop, find good restaurants, and be your own bartender.

The all-inclusive resort would feel effortless.

Simply pay the fee upfront and then settle in to relax for a week of pampering

You make your choice and book your stay.

Feeling excited, you close your laptop and breathe a sigh of relief—you really need this break.

Which option did you pick?

In today’s edition of Why We Buy 🧠, we’re exploring the Pain of Paying — why spending money is downright painful (and what smart businesses can do about it).

Let’s get into it…
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🧠 The Psychology of Pain of Paying

Each time you spend your hard-earned money, you feel a slight twinge of pain.

Even if you’re 100% certain about the purchase, the part of your brain wired for loss aversion feels a little bit like this: 😬

That feeling gets heightened when we spend cash versus using a credit card.

​An MIT study of 64 students bidding on baseball cards found that students paying with a credit card would bid more than double ($61) the amount students using cash would ($29).

When you stay at an all-inclusive resort, you swipe your card before departing—oftentimes weeks or months in advance of the trip—and only go through the pain of paying once.

Each time you get a new Pina Colada or hit the buffet for some tacos, you get to feel the excitement of the experience without the nagging emotion of having spent money.

Instead of getting hits of 😬 your entire trip, you feel like this 🤩

And 🤩 is exactly the experience you want to create for your buyers, right?
​

🧐 Inside Your Buyer’s Mind

Research shows that people judge their experiences based on how they felt at the peak and at the end. Behavioral scientists call this the Peak-End Rule.

Even if the whole experience was fantastic—like enjoying a meal at a Micheline Star restaurant—coughing up cash for the big bill at the end of it can leave a bad taste in their mouth.

When people pay for your products, as excited as they are, the loss aversion part of their brain rings a quiet alarm when they go to pay.

To get this alarm to ring a little quieter, create a buying journey that makes your customers feel less pain each time they buy your products.​
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🤑 How To Apply This

Alright, so how can you apply this right now to sell more?
​

Tech​
Break up big payments into smaller increments

Big ticket items can come with less pain when divided into multiple payments. Smart companies like Apple offer financing options to make purchasing less painful and quiet the nagging loss aversion alarm.

E-commerce​
Reactivate churned subscribers with a free gift or incentive

Just because a customer cancels their subscription doesn’t mean they stopped loving your product. They probably just had other priorities that month.

Offering past customers an incentive or free gift if they resubscribe can win them back. And because their credit card is already on file, you can streamline the checkout process and reduce the pain of payment.

The problem is email reminders get ignored and deleted.

Wanna make your promotion un-ignorable? Send a postcard directly to your customer’s home using PostPilot.

Direct mail reactivation has been shown to lift subscription reactivations by 10X compared to email and digital ads alone. Check out the case study here.​

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Retail & Hospitality​
Reimagine what payment feels like

Businesses that prioritize fun, like casinos or Disney theme parks, understand that paying is painful. That’s why they encourage guests to pay with chips or a pre-paid MagicBand. Losing a stack of chips still stings, but it’s less painful than losing a stack of bills.

And Disney’s MagicBand reduces the pain of paying since swiping a bracelet doesn’t feel like paying, allowing theme park goers to stay in the moment rather than stressing about each purchase.

Service Business​
Get people to pay in advance

Many service businesses wait until the work is done to charge customers. Asking customers to pay in advance moves the pain of paying to the beginning of their experience, giving you the opportunity to wow them at the end.

I recently hired an at-home car detailing service. I paid in advance and they did the job while I worked at home. When I got in my sparkling clean car later that day, I found candy on the seat and a free air freshener. It was such a delightful experience that I felt obliged to write a Facebook post about them.

Media & Education​
Give away free stuff worth paying for

Information is abundant and often free. If you sell info-products, like online courses, cheatsheets, paid newsletters, etc, you’ve gotta show potential buyers you can deliver the goods.

Creating a free course or ebook is a great way to earn trust and build demand for your paid products.

We did this last week when we launched the new Pre-Sell with Pre-suasion Email Challenge. It’s a 6-day email challenge that explains how to persuade people to open to your message using “pre-suasion”.

The email challenge costs $0 but according to Jon Brosio, it’s so good worth paying for.

​

💥 The Short of It

Loss aversion is very real and even exciting purchases can be slightly dampened when it’s time to pay.

Be purposeful about your buying experience to make people feel less loss aversion and more joy from their purchase.

​Until next time, happy selling!