The Prepayment Effect

Understand Your Buyer > How To Convert > The Prepayment Effect

What is it?

The PrePayment Effect incentivise buyers to spend more up front and then run down their credit, incentivising them in the process.

Why does it work?

It works because by offering a discount, as a buyer you are getting a better deal as your money is going further and for the seller you are securing more cashflow and more spend.


How can you use it?

Depending on your offering, if you sell blocks of time or units of stock, you could consider selling them in a prepayment plan. What discount or incentive could you give to help your buyer prepay rather than pay as they use?




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