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6 Advantages of Hyperbolic Discounting

6 advantages of hyperbolic discounting

You may not know what hyperbolic discounting is, but it has vast ramifications on society as a whole. Additionally, a lot of people do not use the power of hyperbolic discounting in conversion optimization.

What Is Hyperbolic Discounting?

Put simply, hyperbolic discounting happens when people would rather receive $5 right now than $10 later. That’s it. People value the immediacy of time over the higher value of money.

Expressed another way, hyperbolic discounting is a person’s desire for an immediate reward rather than a higher-value, delayed reward.

hyperbolic discounting - "now" and "later" boxes, with "now" box checked

You may be confused why someone would not choose the delayed reward if it means a greater benefit.

Here’s the thing: hyperbolic discounting is a cognitive bias, meaning that it is an ingrained mental snafu that defies logic and common sense. When hyperbolic discounting is framed differently, it has incredible power.

The power of hyperbolic discounting adjusts based on the time involved. If you have to wait to receive both rewards you become more likely to want the reward with the greatest benefit.

For example, if you had to choose between $50 now or $100 in 6 months, you’re most likely going to take the $50 today. However, if you are offered $50 in nine years or $100 in a year, you are more likely to choose the $100.

The pattern follows a hyperbola. Once a certain amount of time has passed, people begin to choose the option with the greater value again. For example, most will opt to take $100 in ten years over $50 in nine years.

That’s where the hyperbola part of hyperbolic discounting comes in. A hyperbolic curve displays the effect of hyperbolic discounting, in contrast to an exponential curve.

This is an exponential curve:

exponential curve table

This is a hyperbolic curve:

hyperbolic curve inverted

Hyperbolically, the discount factor diminishes based on the amount of time that elapses.

Hyperbolic discounting vs. exponential discounting

How Hyperbolic Discounting Works in the Brain

Hyperbolic discounting isn’t some nifty gimmick that sometimes works and sometimes doesn’t. Our brains are programmed to be drawn to the tug of hyperbolic discounting.

Although we can’t avoid the feelings that pop up as a result of hyperbolic discounting, we can combat it by recognizing when it’s happening and understanding how to proceed.

google result studies on hyperbolic discounting

A spate of scholarly studies have confirmed the validity of hyperbolic discounting.

Research published in the Journal of Neuroscience discovered the brain makes discounting judgments reflexively and automatically.

We aren’t thinking through whether we want more now or less later. We inherently want to get the benefit as quickly as possible. This desire for immediate reward diminishes as time goes on.

Hyperbolic Discounting Origins

Some scientists explain hyperbolic discounting through an evolutionary approach. If your ancestors found food, they would kill it and eat it right away. They wouldn’t let the scrawny antelope pass to possibly get a fatter one later. They would get the scrawny one now. One little antelope meal now is better than two fat ones in a month. By that time, the hunter-gatherer would die.

Imagine a dehydrated person traveling through the desert. Ahead, they see a small glass of water. If they deny the sip of water and keep going just a little longer, they will receive one hundred water bottles. What do they do?

According to hyperbolic discounting theory, they’d choose to sustain life by having a little bit of water now rather than a lot of water later.

The Power of Now in Hyperbolic Discounting

Copywriters, psychologists, and moms understand the hyperbolic discounting phenomenon all too well. We want what we want, and we want it now.

In the famous marshmallow experiment, Stanford psychologists led a child into a room and offered the child a single marshmallow. The treat was sitting there on a table right in front of them. If the child could wait fifteen minutes without eating the marshmallow, they would receive a second marshmallow.

Although most children were able to keep their appetite in check, the study highlighted an issue known as delayed gratification.

Delayed gratification is the behavioral opposite of hyperbolic discounting. Delayed gratification means “making a choice which limits the ability of getting something now, for the pleasure of being able to have something bigger or better later.”

It’s a concept that goes against hyperbolic discounting and the ingrained ideals of culture — the whole “we want it now” idea.

Our brains are wired for now. Neuroscientists have discovered that our brains light up like a Fourth of July night when we get stimulated by the power of something right now.

brain scans lighting up when being presented with immediate rewards/hyperbolic discounting

What Are The Effects of Hyperbolic Discounting?

Apart from sales gimmicks and advertisements, hyperbolic discounting can have devastating effects elsewhere in life.

For example, each year, hundreds of thousands of people receive coronary-artery bypass graft surgery. The surgery saves their lives. However, it only saves their lives for the long term if they apply the correct lifestyle changes.

Recommended changes include no smoking, more activity, a healthier diet, and faithfully taking medications. Tragically, however, “Ninety percent of those patients decide to forego survival and comfort in favor of the short-term pleasures of unhealthy foods and laziness” (source).

Let’s examine another massive example of hyperbolic discounting. It’s not as morbid, but it’s equally devastating: credit cards.

Credit cards push hyperbolic discounting to the max. A credit card user can have something of value now, or they can wait until they can afford the item, thereby saving them the money they would be paying in massive interest rates.

Here’s another example. Many people save for retirement because there’s no immediate reward for saving for the future.

hyperbolic discounting's impact on retirement savings

If you could go out to eat at a nice restaurant for $200 tonight, why put that money in some retirement fund to enjoy when your 72?!

Waiting to invest in retirement has its own hyperbolic curve, and it’s not very pretty.

graph showing hyperbolic discounting's affect on retirement savings

Hyperbolic discounting is dreadfully powerful. It’s hard for people to deny themselves now in order to enjoy a reward later. I would never advise any marketer to exploit the hyperbolic discounting principle in harmful ways.

I’ve used the above examples to show the incredible power of hyperbolic discounting, but I also want to use them as a warning. On a macroeconomic scale, hyperbolic discounting can have devastating results.

On a smaller scale — conversion optimization, ecommerce, etc. — the results are innocuous, beneficial, and appropriate.

Put Hyperbolic Discounting to Work

Are you ready to leverage the power of hyperbolic discounting? Here’s how it’s done:

1. Raise Your Price. Wait For The Reward.

Hyperbolic discounting gives you license to raise your price as long as you delay payment.

When you offer to postpone payment for your goods or services, the items’ price becomes less relevant to the buyer.

This is because as soon as they realize they don’t have to pay right away, the customer doesn’t think about paying. Instead, the power of hyperbolic discounting and the reward of getting the product immediately dominates your customers’ thinking.

Instead of thinking, “Wow! That’s expensive!” the buyer is thinking “Wow! I can have it now!” Based on the hyperbolic discounting principle, the wow-I-can-have-it-now thought is going to win out.

As soon as the price consideration is removed, the buyer is ready to make their purchase, even if it costs them a lot of money (someday). You’re ready to profit.

2. Buy Now. Pay Later.

This is one of the most common forms of hyperbolic discounting in marketing. You may know it better as the “Buy now! Pay later!” technique. uses this approach. Their website is packed with hyperbolic discounting. If you want to exercise your delayed gratification muscles, go check them out.

examples of QVC hyperbolic discounting techniques like "buy now! pay later!"

PayPal’s infamous PayPal Credit (previously “Bill Me Later”) was also built on the whole psychological principle of hyperbolic discounting.

paypal credit screenshot

Montgomery Ward does it, too.

montgomery ward example of hyperbolic discounting

Lurking behind the principle of hyperbolic discounting is the fact that you’re applying for a credit card. Remember what I told you about credit cards? They are built on the power of hyperbolic discounting.

You don’t have to offer credit cards in order to use the hyperbolic discounting technique. You can simply delay payment, allowing the user to make a purchase and wait to pay. It’s risky for you, but it could improve sales.

3. Give an Immediate Gift.

With hyperbolic discounting, timing is everything. That’s why some people refer to it as temporal discounting.

The time element is the most important factor for buyers. Rather than wait for any length of time for a reward, they prefer benefits that are available immediately.

In many cases, a simple and inexpensive gift will suffice. Sometimes, users will convert based on the promise of an immediate result, even if the full product is not available until later.

EA Access gives gamers the ability to join a program where the big results aren’t available until later. Gamers are likely to convert, however, because they get immediate access to the parts of the game.

example of "immediate gift" hyperbolic discounting technique - EA Access

4. Charge a Higher pPrice for a Shorter Term.

Have you ever noticed that some websites offer payment plans that don’t make financial sense?

Here’s the type of thing they offer:

  • Buy 1 month: $9.99
  • Buy 1 year: $39.99

Most people can do the math. They know that there are twelve months in a year. If one year costs $39.99, then one month at the yearly rate is only $3.33. Why would anyone pay $9.99 for one month?

Hyperbolic discounting, that’s why. The user wants to pay less now. They don’t want to pay more, even if it results in a discount over the long term. They consider the issue from a hyperbolic discounting perspective, not a true value perspective.

Here’s an example:

Example of Grammarly's hyperbolic discounting subscription page

Grammarly uses this on their pricing page. Users can pay $29.95 each month, or $11.66 per month. Obviously, you would choose to pay the $11.66.

However, you have to keep the framing effect in mind. How the price is framed heavily influences how the price is perceived. Thus, when presented with a lump sum payment of $139.95, users are tentative. They would rather save money now than save money over the long term.

As a conversion optimizer, you can use this technique to your advantage. Users get to choose their payment method. You’re getting more value per order from the short-term pricing option because buyers are heavily influenced by hyperbolic discounting.

5. Pay For Referrals Right Away.

Online affiliate programs are very popular, but not very strategic. Here’s how they work:

If customers refer friends, then they get money when the friends sign up. Here’s a screengrab from Payoneer:

Payoneer screengrab of the hyperbolic discounting technique of the friend referral program

This is a nice feature, but who wants to wait for their friends to sign up? Even though the payout could be big, the delay is insufferable. Remember, people want the reward now.

A more strategic approach of hyperbolic discounting is to pay people for the referral, rather than making them wait for their friends to actually sign up.

If you offer, say, ten cents for every referred friend, then you can give the referring friend $10 to refer 100 friends. This approach could get you a lot more potential leads.

If you stick with the old pay-when-they-sign-up model, you may have to pay $10 for only a single referral. With the pay-now model, you can compel the referring friend to make 100 times as many referrals.

6. Offer Mail-in Rebates

Why do some retailers offer mail-in rebates? The idea is that if you cut a coupon, scan your receipt, and mail them or upload them to a website, you might get a check in the mail in 20-40 weeks.

Who even has time for that? Do retailers really think that they’re doing you a favor? Of course not. They’re using hyperbolic discounting.

firestone 50 dollar rebate

Mail in rebates work for only a select few customers: the disciplined ones who never lose anything and save their receipts. In other words, not many people.

People are likely to buy the product now, thinking that they might get a discount in the future. More likely than not, that mail in rebate form will languish in a stack of papers until it expires. The retailer doesn’t have to pay anything.


If you want better conversion rates and smart marketing power, then this article was written with you in mind.

Are you ready to harness the power of hyperbolic discounting in your marketing strategies? Let’s talk!

About the Author: Jeremy Smith is a conversion consultant and trainer, helping businesses like Dow Chemical, American Express, Panera Bread, and Wendy’s improve conversions and strategically grow their testing culture and digital presence. Jeremy’s experience as the CMO and CEO of technology firms has given him a powerful understanding of human behavior and profit-boosting techniques. Follow him on Twitter.

The post 6 Advantages of Hyperbolic Discounting appeared first on Neil Patel.

10 eBay SEO Tips to Drive Sales

There are two billion transactions made on eBay every day, and most consumers spend only around eight minutes on the site to make those purchases.

That’s a vast untapped market if you’re not on the site yet.

But, if your focus is on SEO for traditional search engines, you may be hesitant to try this site. However, you’re in luck, as eBay is more-or-less a hyper-focused search engine.

ebay SEO homepage

That said, eBay SEO isn’t identical to Google SEO. That’s why, to drive sales on eBay, you must master eBay SEO.

How Does eBay’s Search Engine Work?

Cassini isn’t quite like Google because eBay users are often coming to buy rather than browse. 

As a result, Cassini and eBay try to make the process of finding items, learning about them, and deciding to bid or buy as efficient as possible. While keyword relevance plays a huge role, Cassini also focuses on other factors:

  • User Convenience: Users need to immediately know what they’re looking at, why they should buy it, and what will occur after purchasing. They shouldn’t have to dig for any information.
  • Bang for Their Buck: Prices, including shipping and handling, need to be reasonable for the items sold.
  • Buyer Satisfaction: Put bluntly, eBay and Cassini care much more about the buyers than the sellers. They need to see you have good reviews and positive interactions with customers.

Why Should You Improve Your eBay SEO?

If you want to make money on eBay, you need to master eBay SEO. Showing up earlier on search engine results pages (SERPs) means more people will see your listing, and the more who see your listing, the more potential customers you have.

10 Tips for Mastering eBay SEO

Becoming a top seller on eBay works differently from other search engines, including many shopping platforms. Below are 10 tips for conquering the world of eBay SEO.

Use Effective Keywords in eBay Listings

Keywords are where eBay and other search engines are the most similar, as keywords are integral to online sales regardless of which site you’re on.

Ensure your keywords tell consumers precisely what they’re looking at. Use these keywords in both your title and description.

It’s not enough to tell your potential customers you’re selling, say, watches. You want to figure out what keywords they’re using to find your exact item.

This is why you need to do keyword research, including discovering what people are looking for in general and on eBay specifically.

With keyword research tools like Ubersuggest, keyword research for consumers can be a breeze. 

If we’re looking at watches, Ubersuggest can discover keywords people are using when shopping for them:

ebay seo ubersuggest example

If you want to make eBay a significant part of your business, look into Terapeak. If you’re a Basic, Premium, Anchor, or Enterprise store subscriber, you have free access to this. If you’re a Starter Store member or independent seller, it’s $12 per month if paying annually. 

With Terapeak, you can access eBay-exclusive assistance and information, including:

  • Help with optimizing your listings
  • Details about what your competitors are doing
  • Market research trends
  • Assistance with selling unusual, used, and rarely-sold items
  • Research about what to do if you want to sell internationally
  • Tips to improve listings for unsold items

If you search for “watches” on Terapeak, you can narrow your search to fit your eBay listing. After you hit “Research,” you’ll see examples of actual listings and prices:

ebay SEO research products
ebay seo watches listing example

Make Your eBay Listing Title Pop

Your eBay product listing title is a crucial aspect of performing well on the site’s SERPs.

If a user searches for “watch” on eBay, they’ll initially see sponsored listings, but they’ll quickly come across organic listings. Here is one of the earlier organic results for watches:

ebay seo make your listing pop

Well-written titles make your products easier to discover by eBay’s algorithm and consumers. These titles are:

  • Keyword-focused. Make it easy for people who are scrolling to know what you’re selling. Don’t stuff your keyword in there unnecessarily, though—you only need it to appear once.
  • Engaging. Don’t just put words together as a title describing your product. Make it engaging and easy to read.
  • Concise. You only have 80 characters to create your title. Keep your title as short as possible without losing its meaning. 

It’s not uncommon to see listings that go against these recommendations. For instance, the title above could have said something like, “Watch Men New Invicta Watch Scuba Chronograph Stainless Steel Black Dial Watch!!” Everything is there, and the keyword appears a few times—but which title would you click on? 

Write Detailed but Concise eBay Listing Descriptions

eBay listings need to be both detailed and to-the-point. To write these, you need to:

  • Incorporate keywords. Place keywords naturally in your description to make it easy for customers to find your product.
  • Highlight the benefits. Show customers what they’ll benefit from your product. Don’t just highlight the specifications—those are in your item details and identifiers anyway. 
  • Be honest. If you sell used items, don’t try to cover up any damage. Consumers don’t appreciate getting things that aren’t in the condition they expected, and this could result in poor reviews and returns—which eBay doesn’t like. 
  • Keep it short and simple. Long, complicated descriptions may put customers off.

Write your descriptions for people first. With search engines becoming more advanced, keyword stuffing doesn’t work anymore. 

Never use invisible text. Not only does this make you look out-of-touch with current SEO trends, but it violates eBay’s rules and could get you shut down.

Incorporate Clear and Effective Product Images

All search engines, eBay’s included, prioritize good user experience (UX). That’s why you must use high-quality images in your product listings.

If you look back at the title example above, think: If you hadn’t been told we were looking at the title, would your eyes have gone to the title or the image first?

If possible, hire a professional photographer for your images. But, if you don’t have access to a pro, you can take your own photos and still get clicks.

Best practices for taking your own eBay listing photos include:

  • Neutral backgrounds
  • Good lighting
  • Clear images showing all details
  • No bells and whistles like thumbnails, collages, or borders

Don’t hide damage if your items have any. In fact, consider highlighting it in one of the additional photos in your listing, so your customer knows what to expect. You can have up to 12 pictures on an item’s page.

Make Your eBay Listings Accessible

Accessibility is a critical component of SEO. Accessibility means making your store easy to use for shoppers who are visually impaired or otherwise struggle with reading text.

Because search engines want to offer a positive UX for all users, they favor pages designed with accessibility in mind. That’s why you must pay attention to your eBay store’s accessibility.

To make your store accessible:

  • Use image alt tags. Image alt tags should clearly and briefly describe your visuals so screen readers can tell visually impaired users what’s on the screen. Include your keywords in your image alt text for better discoverability.
  • Use text effectively. Write your descriptions succinctly, using a reasonably-sized font, short sentences and paragraphs, and colors that are easy to read (such as black font on a white background instead of yellow font on a white background).
  • Use correct grammar and spelling. Not only could poor grammar and spelling make some users click away out of pure annoyance, but misspelled words can be challenging for folks using screen readers, and poor grammar can make things unnecessarily confusing.

Use the Correct eBay Item Category

Choosing the correct category for your eBay listing is essential. eBay will suggest a category for you—for instance, it may automatically select “wristwatch” if you type in “watch” for your listing. But, if you’re selling a pocket watch, this will confuse buyers and the Cassini algorithm if you don’t fix it.

You can add a second category if you think your item would do well in more than one. This costs a bit of money but may be worth it. For instance, if I’m selling a wristwatch from 1945, I could select the following:

Ebay SEO - Use the Correct eBay Item Categories

This way, I appeal to people searching for wristwatches and people looking for vintage watches.

Fill Out Item Details and eBay’s Unique Identifiers

In addition to writing a description, add item details using eBay’s dropdowns and checkboxes. These help eBay figure out what you’re selling. 

Use as many unique product identifiers as possible. According to eBay, unique product identifiers help the algorithm match product listings to queries faster. They also help your products get greater visibility.

eBay recently began requiring certain product identifiers on specific types of items. For this mandate to apply, the products must be new or manufacturer refurbished—though you can (and should) include the information for items outside these parameters if you have it. The required identifiers are:

  • Brand
  • Manufacturer Part Number (MPN)
  • Global Trade Item Number (GTIN)

This Invicta watch above has a ton of product identifiers:

Ebay SEO - Product Identifiers

The UPC is the GTIN; the model is the MPN.

While adding unique product identifiers may seem like a pain, it goes a long way in boosting your eBay SEO. Plus, they keep you from having to type every little thing out in your product description. Some crossover is fine, of course.

Provide Stellar Customer Service

Store ratings and customer complaints heavily factor into how high you rank in eBay’s SERPs.

The first step in providing excellent customer service is to frontload information. Be very clear about shipping, returns, and product information in your listings. This includes letting them know your hours of operation (i.e., when you’re able to respond to messages) and the days on which you ship. Your customers should have zero surprises in store.

If a customer or potential customer contacts you with questions, answer quickly. Further, if you’re getting the same question multiple times, update your listing so it’s answered within the description.

Handle complaints and concerns with your best “customer service face” on. When issues arise, you can still earn a positive review if you handle things quickly and politely.

While eBay is more customer-focused than seller-focused, they won’t leave you hanging if you have an issue. Their Seller Help team can assist you with troublesome buyers, returns, and more.

Just like with any other site that has reviews, actively encourage your customers to write them—though you can’t do this in your listings or offer free stuff or money in exchange for a good review.

Open an eBay Store Account

Every eBay seller needs an account, but not everyone needs a store account. There are tons of individual sellers on the site, trying to empty their houses of unneeded items or selling things at a small scale. But, if you’re using this as a major revenue source, get a store account.

If you used eBay a while back, you might remember having an “About Me” page that allowed you to give consumers a ton of information. eBay eliminated that in 2014. Nowadays, the information you can provide customers on your store description is pretty limited. Let’s look at the store page for Adidas: 

Ebay SEO - Product Identifiers adidas

An image, logo, and brief description—that’s all you can include. You’ll notice they don’t have a link to the official Adidas site. eBay doesn’t allow external links except in limited cases, and this never includes links to other stores. You can’t even have a website typed out but un-clickable (on your store or in a listing) or as your username.

However, a store page may be worth the money if you sell at a high volume. eBay Store subscribers get:

  • Free listings and discounted fees on sales
  • A traffic boost
  • Listing optimization tools
  • Easy “out of office” capabilities
  • Terapeak access at no cost
  • Promotions Manager access
  • Business services discounts

Subscriptions vary in prices ($4.85/month for Starter through $2,999.95 per month for Enterprise subscriptions) and perks.

Spring for Promoted eBay Listings

If you want to ensure you appear early in SERPs, you can pay for promoted listings.

When I searched for “Watch,” 14 out of 50 listings on page one of the results were sponsored. Somewhat uniquely, they were sprinkled throughout, making them appear more like standard items. Sponsored listings also appeared on subsequent pages.

Promoted listings’ visibility is an average of 36% higher than standard listings. And these aren’t pay per click—you aren’t charged until a purchase is made. 

Successful (or unsuccessful) promoted campaigns can affect your overall rankings in the long run.


One of the best ways to drive sales on eBay is to make your products more visible than those of your competitors.

That’s why you must employ these eBay SEO tips.

Whether you’re planning on launching your store or already have one, pay attention to search engine optimization, and your sales could soar. 

Which eBay SEO tips have you used to improve your rankings? 

The post 10 eBay SEO Tips to Drive Sales appeared first on Neil Patel.

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