The In For A Penny Effect

Understand Your Buyer > How People Work > The In For A Penny Effect

What is it?

The “In for a Penny Effect” describes the process of rationalising a larger purchase once you have already decided to buy. It comes from the phrase “In for a penny. In for a pound.”


Why does it work?

It works because once we have decided to buy, we are desensitised to the money we are spending and now “invested” in the purchase. If we’ve already rationalised spending £x then the leap from £x to £xx is smaller and easier to make.

Motivated by FOMO and loss aversion we then increase our spend hoping to achieve the best outcome possible.


How can you use it?

In a similar approach to the freemium model, but with paid goods and services. How can you get your clients to engage in  a purchase and then offer them a superior alternative or upgrade once they have already decided to buy?

This is the art of up-selling and where having a “deal” approach with options can work well indeed.


See also



Like this kind of stuff? Want more?

Then Practical Sales Training™ is for you…

Action focussed, affordable sales training

for entrepreneurs and small business owners.

Brought to you by James Newell