For example, shoppers sometimes buy too much food and then over-eat just to “get their money’s worth”. Similarly, a shopper may have a £20 discount voucher and then drive for hours through a blizzard, just because she feels that she must spend the voucher due to having initially decided it had a value.
If the costs outweigh the benefits, the extra costs incurred (inconvenience, time or even money) are held in a different mental account than the one associated with the in-store transaction value (Thaler, 1999).
When it comes to what this means for shopping, in-store and online, there are several considerations:
Take a deposit
Once a shopper has made a financial, time based or emotional investment toward a more sustainable purchase, they tend then to not see that as part of the cost, focussing instead on what remains to be paid.
Shopper investment
Once you can get shoppers to invest time, effort and/or money in greener choices, they will be more likely to purchase. If only so that they don’t lose their initial investment.
The free incentive towards sustainability
Shoppers are significantly more likely to complete a ten-stamp card for a free coffee once two spots are stamped. More so than an eight-stamp card without any spots stamped.
As with all things in marketing, getting the best results from sunk cost bias is a balancing act. You’ll have to consider your brand image and business ethics, sustainability rated goals and the opportunities your products or services provide for exploiting the sunk cost bias phenomenon.
