Here’s an odd — but important — question for you: Would you rather receive $1,000 365 days from now, or receive $1,002 in 366 days?
When faced with such a choice, most people will think (and often say), “Well, if I can wait a year, I can certainly wait a year and a day, so I’ll take the $1,002 in a year and a day.”
On the surface, this response seems to prove that when faced with an economic choice, delayed gratification provides a better return and that people operate rationally when making this type of decision.
What it actually does is set up a beautiful contrast.
Try asking the same person this question: Would you rather have $1,000 today, or $1,002 tomorrow?
Typically, before you even finish that question, the other person will blurt out, “I’ll take the $1,000 today!” We say we understand the value of putting off immediate gratification, but we rarely act like we do. This is called present-value bias.
Two examples of marketers who leverage present-value bias are eBay sellers who use the “buy it now” feature. Sure, there’s a chance a buyer might be able to “win” the item for less if he waits, but he’d potentially be sacrificing the certainty of owning the item. Another example is Amazon.com’s one-click “buy now” option. It’s fast, your credit card is on file, there no need to enter an address, and if it’s a Kindle book download, you’ll have your purchase in seconds. Both of these methods leverage people’s tendency toward present-value bias.
How can you use leverage your understanding of present-value bias to become a more effective persuasion practitioner? By making it easy for your target to say “yes” right now (easy to sign, easy to pay, easy to select) and making sure there is an immediate pay off for your target, such as a monetary return, a time savings, an information exchange or a reduction in labor intensity.
In other words: You, too, should have a “1-click” button.