Bottom-dollar effect
Why spending your last dollar makes purchases feel worse and how to prevent this bottom-dollar effect from hurting your marketing.
In this issue
Hey 👋 The Crew here.
While Severance wrapped its second season in style, a new TV show emerged that took the audience by storm—Adolescence.
Hmmm… maybe all shows ending in -nce are worth checking out?
Just something to think about…
Reading time: 4 minutes, 34 seconds
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If the money’s tight, a delicious meal can leave a bad taste in your mouth.
Imagine this: You’re eating out with your friends.
It’s the end of the month, and your leisure budget is almost dried up.
Even so, you spend all the remaining money on your favorite meal. And as you take your last bite, the thought of spending all your excess money takes over, and you don’t enjoy it at all.
That’s the Bottom-dollar effect—a cognitive bias where we feel stronger negative emotions when spending the last of our money compared to when we have plenty of funds available.
To back up this theory, a trio of psychologists—Soster, Gershoff, and Bearden—found that participants rated movies lower when they used their last credits for the tickets.
… And no, the movie in question wasn’t the new Snow White.
Jokes aside, the Bottom-dollar effect is real. When consumers exhaust their budget on a purchase, they may associate negative emotions with your product or service.
This can lead to negative feelings towards your brand, lower reviews, and affect your customer retention. And even tank your reputation.
What can you do? Try to prevent the Bottom-dollar effect from happening, of course.
Let’s see how.
Three ways to prevent Bottom-dollar effect
Time your promotions
When finances are lacking, people may associate your brand with hardship.
It’s not your fault, of course. But the thought of spending the remainder of their hard-earned money on your product or service—no matter how good it is—will surface negative feelings.
The solution: Time your promotions around favorable financial cycles.
For example, try not to run promotions near the end of the month when the cash is tight, or right after tax seasons, or after major holidays.
Instead, you can use the post-holiday period to build your email list or awareness, then reconnect with your audience when they have excess cash.
Offer discounts on longer-term subscriptions and bundles
Bottom-dollar effect is closely related to Buyer’s remorse.
But buyers are less likely to regret a purchase if they see it as a long-term investment—even if they spend close to all their money on it.
Ahrefs immediately points out you can save up to 17% if you commit to a longer subscription:
If this model seems familiar, that’s because many do it. We also do it for our Stacked Marketer Pro subscription.
Messaging like “save money in the long run” shifts the focus from immediate spending pain to future benefits.
So even if you have to pay for a large sum, you feel like it’s worth it.
Create low-risk entry points
People holding their last bucks hesitate to make big commitments.
… Especially if they suspect they won’t get enough value for the money. A familiar feeling, right?
And spending last dollars on something likely to disappoint will make dissatisfaction hit even harder.
So what can you do? Offer ways for customers to experience your product with minimal risk or without the burden of paying much:
- Free trials. Let customers experience your product without upfront payment, lowering purchase anxiety.
- Low-cost starter packers. Offer budget-friendly entry-level options that provide value without a big financial leap.
- Money-back guarantees. Reassure customers that if they’re not satisfied, they won’t lose their money.
- Buy now, pay later. Spread out the cost to make the purchase feel more manageable.
The Buy now, pay later option, for example, eliminates that dreadful feeling up front because it isn’t forcing you to splash the entire sum, leaving you with extra money:
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ICYMI, last time we looked at the Halo effect.
The “Last cent gone” Crew
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