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Do you prefer paying in cash or by card when you pay for stuff?
Personally, I love the convenience of card payments, specifically on my phone, because it just means I don’t have to carry around my wallet everywhere I go - or panic if I had forgotten it at home.
If you’re the same, then yes - we both like how easy it makes things.
But there’s another reason why many people prefer swiping a little plastic card instead of handing over physical money - it’s painful to watch your hard-earned money disappear, and paying on a card helps avoid feeling that pain.
The Pain of Paying is another great example of behavioural economics that can be used to make the decision-making process easier for the customer and result in higher conversions for your store.
The reason we feel pain when paying is simple: since we’re naturally wired for loss-aversion, spending money seems like a loss, and not even the gain we get from using the product can eliminate it completely, influencing our decision of whether or not to complete the purchase.
The Pain of Paying was first explored by Ofer Zellermayer’s thesis in 1996 and found that not only is paying for stuff painful, it actually can take away the joy and excitement we associate with purchasing goods.
There are, of course, ways to make your customers feel better about purchasing your products. Zellermayer identified six characteristics that can weaken the pain of paying:
The transaction must be perceived to be fair;
The transaction must be considered an investment, compared to pure consumption;
The transaction should be an immediate payment, rather than drawn out;
The expense should be undertaken for the sake of someone else;
The consumer should believe they are in control over their choice; and
Payment should occur before consumption, rather than after.
Now, the first one is pretty obvious - no one likes to feel like they’ve been taken advantage of - but let’s take a closer look at some of the other characteristics you could potentially use for your ecommerce store:
The transaction must be considered an investment, compared to pure consumption.
Buying a house is an investment. Buying another pair of shoes just because you like the look of them? Not so much. Of course, if your product is more of an impulse purchase you won’t get far trying to convince your customers otherwise.
But if you are, for example, selling hand-crafted products that are more durable compare to mass-produced alternatives, you can leverage that in your messaging and show that they’re making an investment by choosing quality and craftsmanship.
BNPL (But Now, Pay Later) payment options also help customers to make that decision more confidently and faster, since installments feel less painful than “loosing” a huge chunk of cash at once.
The transaction should be an immediate payment, rather than drawn out.
It’s simple: don’t prolong the pain for any longer than you have to, regardless of the amount. That’s why checkout optimisation is a must, so that path to purchase is straightforward and doesn’t add to their anxiety before paying. A great way to lessen the negative emotions around purchase are automated payments, so if you don’t already offer to save customer’s payment details for future, it’s something you might want to change this year.
The expense should be undertaken for the sake of someone else.
This is as simple as offering free shipping, or at least a free shipping threshold, but it can also apply to your returns policy. If you make it super easy for your customers to return items and take most of the heavy-lifting on you, they’re more likely to pay for your products.
What are you currently doing to weaken that pain of paying for your customers? What else could you be doing?