Hyperbolic discounting is a cognitive bias, where people choose smaller, immediate rewards rather than larger, later rewards — and this occurs more when the delay is closer to the present than the future.
Researchers often run the following experiment to prove hyperbolic discounting. Imagine you’re given 2 choices. Get £100 today or £120 in a week. Most participants choose £100 today.
But when the same question is asked with the same 1 week interval, but a year in the future, participants largely choose the bigger reward.
Simply put, shoppers prefer immediate rewards over delayed gratification. So how do you address the issue that shopping more sustainably is more about long term consequences, and even perhaps paying more money now?
Have it now
Align your sustainability initiatives with some form of immediate gratification or reward scheme for you brand and when the reward is instant, shout that from the trees.
Rungs up the ladder
You can run schemes where shoppers are rewarded over time (think coffee cup stamps and a free cup after so many). These work better if you give shoppers a couple of free stamps to start them off, then they are proven to be more likely to continue the journey to the end of the process.
Fine-tuned sustainability related promotions
Recognise that you can give away less in terms of added value if shoppers can ‘cash in’ now. And that longer-term motivations may need to be bigger, but not every shopper will get to the gold at the end of the rainbow.
Acknowledging that hyperbolic discounting exists and evaluating trade-offs between now and the future will help you do the right environmental things for your brand.
