With fuel being so expensive now, it’s almost painful to fill up at the pump. What’s worse is when gas stations try to be sneaky about fees.

higher gas pricesGas Station #1
For example, two weeks ago, I went to a station. The prices were advertised brightly as $4.59. However, when I started filling up, I noticed the pump was charging $4.65.

When I contested, the attendant pointed to the tiny sign below the large brightly lit display that had higher prices for people who use credit cards.

I was furious!

  • How often does someone not use a credit card to pay at the pump?
  • And why wasn’t that miniature sign made more prevalent?

Gas Station #2
Yesterday, I had a completely different experience. After boycotting my local station, I learned that my new gas station —

  • Offered a discount for using cash. How wonderful!
  • Even if I chose to use my card, I wouldn’t get sneakily penalized. Conversely, I would get rewarded if I didn’t.

So, one business rewarded patrons with savings while the other penalized customers with secret credit card fees, which led to my boycott.

Reward vs. Penalization

Using the examples from above, rewards obviously have major benefits over penalizations.

Actually, this method was something stressed when I was studying for my California Teaching Credential. Children and adults alike both respond better to positivity.

You might have heard the saying that honey works better than vinegar. Well, it’s true.

honey pooh bear

Rewarding (vs. penalizing) is the strategy. Tactically, you can apply it in countless ways. Here are just some examples I made up.

If you book by this week, I’ll have extra time to __________.

Whether or not you will have extra time, this encourages people to get something desirable for immediate action.

Let’s commit to this album design today and I’ll throw in the extra pages that you were considering to omit because of budget.

Redesigning takes more time (even if you have a designer). Time is money.

Your client will be happy because he or she won’t have to omit pages. You will be happy because you won’t have to wait months to finalize an album design.

Buy all of these prints and _______________.

Again, offer something desirable, thus making commitment easier.

Happiness

In no way am I suggesting you to discount. You’re just rewarding people for certain action … you’re helping them choose.

Everyday, we are posed with decisions. The goal here is to offer options … with one more favorable than the other.

Similarly for parents with their children, it’s the difference between

  • giving free time to play a game for good behavior or
  • taking away TV (or something desirable) for bad behavior.

While both might work to encourage a desired outcome, the former is easier for a kid (or anyone) to accept. The latter is a form of loss aversion — taking away something that was already his or hers.

Isn’t psychology fun?

Lawrence Chan

P.S. Speaking of psychology, Leeray shared a lovely note with me about my psychology behind pricing and packaging e-book.

P.P.S. Lastly, the promotion for my SEO e-book ends TODAY! Be found.

P.P.P.S. Speaking of honey, I learned from an Australia mate to put honey and peanut butter on toast! And when I shared America’s love for peanut butter and jam, they were equally freaked out. Haha I love how cultures differ …

What do you like to put honey on?