Delay Discounting

By Ben Ambridge


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What do the following groups of people have in common:

Heroin users, drinkers, smokers, heavy gamblers, people suffering from obesity, shoplifters, people who don’t exercise, people who skip breakfast, people who don’t wear a seatbelt, people who don’t go to the dentist, people who don’t wear sunscreen?

All of these groups have a key personality trait in common, and this is something called delay discounting. All of these things – drinking, smoking, avoiding exercise, shoplifting – involve getting an immediate reward, but – in return – giving up a much better reward that comes much further down the line: being healthy, not getting cancer, not getting arrested and potentially sent to prison.

The smart option is to accept the short-term pain for the long-term gain; but people are very bad at doing this. And actually, although drug addicts and shoplifters are at the extreme end of the scale, we all do delay discounting to some extent.

For example, what would you rather have – £100 now, or a guaranteed £110 pounds in 3 months’ time? A few people who are very rational, and have a huge amount of self-control would go for £110 in 3 months’ time. But I bet you, just like nearly everyone else who is offered this choice, would go for the £100, right?

Even though you know it doesn’t make much sense in logical terms, we’re just hardwired to think I want it NOW.

Delay discounting is such a powerful phenomenon that you really need to make sure that it’s working for you, and not against you, on your site. One obvious way that you can do this is to offer next-day delivery, immediate download, immediate access, or whatever it is that you’re selling.

And remember that this I want it NOW isn’t a rational response, it’s an emotional one. You might think that, for what you’re selling, having to wait a day or two won’t make any difference to your customers.

And maybe, if you look at it purely logically, you’re right. But, whether they actually NEED it immediately or not, your customer’s instinct is going to be screaming, I want it NOW.

This might be as simple as offering an express delivery option. Amazon has been incredibly successful with this – since their Prime service is an annual subscription rather than a pay-per-item thing – they can really play on this instinct. Yes, you can have it TOMORROW, and we won’t even charge you ANYTHING.

Of course, you’re not going to compete with Amazon Prime; but you can still take elements of their approach. For example, you might subsidise next- or same-day delivery, or at the very least make sure that you offer it.

It’s the same thing with special offers or discounts. £50 off your basket right now is MUCH better than £50 taken off your first bill, £50 credited to your account in 6-8 weeks if you send off this form, and so on.

In fact, giving a smaller discount NOW is usually going to be more persuasive than giving a larger discount in the future, as well as potentially costing you less.

So, whatever it is that you’re selling, remember that you’re there to serve your customer. And your customer is looking at the screen and stamping their foot like a toddler shouting “I want it NOW”.

Ben Ambridge
Hi, I’m Ben. I’m a Reader in Psychology at the University of Liverpool and I lead consumer psychology at Endless Gain. I’m interested in how research findings from academic psychology can be applied in our everyday lives as consumers. And, importantly how psychology plays an influential role in ecommerce. I write a weekly psychology column for The Observer, and my book Psy-Q: You Know Your IQ - Now Test Your Psychological Intelligence has been translated into 15 languages. Check out my TED talk, "Ten Myths about Psychology, Debunked".

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