One of these days I’m going to try an experiment.
I’m going to sell an information product without asking for payment in cash money.
No PayPal. No credit cards. No money will exchange hands until the final moment after they’ve been thoroughly hooked.
I’m betting that I’ll make more sales, and here’s why …
In “Predictably Irrational“, Dan Ariely ran a little experiment to test his own theory about cash. In the experiment (run at Harvard – smart people), he gives the same simple math test to three groups of students.
Everyone is told that they’ll get 50 cents per correct answer. It’s not a lot of money to you or me, but to a student, a few extra bucks can go a long way towards a more fulfilling weekend.
Group A is told to hand their test results directly to the cashier. They get an average of 3.5 answers correct.
Group B is told to tear up their test, then TELL the cashier how many they got right. Clearly the smarter group, they got 6.2 correct.
Group C, like group B is told to tear up their test, but instead of getting cash right away, they are told they’ll receive “tokens” for correct answers. They’re to walk 50 feet to the cashier on the other side of the room and exchange tokens for cash. They got 9.4 correct answers.
Was group C smarter? No. They cheated more.
Once cash was removed one step from the transaction, they felt more inclined to cheat the system.
It Makes People Cheat More … But Will They Spend More?
Robert Ladouceur and Serge Sévigny (Journal of Gambling Issues: Issue 23, June 2009) conducted a study on gambling machines. They found that people spent LESS money on gambling when the machine displayed their actual cash winnings or losses.
Again, by removing “cash” one step from the transaction, we discover that the rational part of people’s brains shut down. They’ll cheat more AND spend more when the money part of the deal is removed just one step away.
Is it no wonder that casinos today have moved away from cash entry to tokens, and from cash spilling out of the slot machine to a “ticket” you redeem for the cash?
I remember when my little sister and I spent a couple hours at a casino in South Lake Tahoe after a day of skiing. She won the jackpot on a nickel slot (it was a looonnng time ago).
After placing the piles of nickels into a cup, we happily quit gambling. Although it only amounted to twenty dollars or so, we felt completely satisfied (plus, we got free drinks).
Would we have quit if the machine simply displayed a “credit” of $20? Heck no. We would have kept playing, rapidly losing our huge winnings in a matter of minutes.
How I Think This Applies to Internet Marketing
This is the experiment I’ll run. Feel free to try it on your own and let me know how it works.
Step One: Create a group of products with different values.
First, create several information products that have different values. Instead of assigning a cash value to each ($47, $97, $3,000), assign a “Credit Value” to each.
One credit equals one dollar. So, the $47 product is listed as 47 credits and the $97 product is listed at 97 credits.
[Note: Sound familiar? It's the same "point" system used by credit card companies to buy products with points.]
Step Two: Write killer copy and give credit away.
Then, after I do a few copywriting magic tricks to get them emotionally involved in one or more of my products, I tell them that I’ll give them 10 credits toward ANY product just for reading my web page.
Step Three: Make the sale.
Only after they go to the shopping cart will the credits be converted to dollars. That is, they’ll get to the shopping cart without ever seeing a dollar figure (only credits, with a very visible note that explains the dollar value of a credit).
To keep them from bailing out at the shopping cart, I’ll need to reiterate and amplify the benefits of having the product. By this time, they should be emotionally involved in the purchase and will justify the expenditure because they got a “deal.”
Step Four: Make them feel smart
This part is unfortunately overlooked by a lot of businesses. It’s your “Thank You” page.
You want to make them feel smart for making the right decision …
Then, if you’re really daring, give them 10 or 20 more credits toward the purchase of a companion product. Explain the benefits of the companion product clearly and you should get a conversion rate of 20 percent or more.
Will It Work?
I’m betting (with tokens, of course) that my experiment will work exceptionally well. By removing the money one step from the buying process, I believe that as marketers we stand a much better chance of swaying the reader to purchase one or more products.
In fact, I think we’ll actually remove “money” as an objection to the sale.
What do you think? Add your comments and thoughts below.
If you’d like some help figuring out how to drive more traffic to your website, and more importantly how to make more sales from the traffic you get, then give me a call. I can help you with both sides of the internet marketing game.
