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?
Example:
A copywriter offers two ways to work together:
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Pay as you go: £250 per project
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Prepay credit pack: Buy 5 projects upfront for £1,000 (saving £250)
Clients who prepay:
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Get better value
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Are more likely to return to “use up” their credit
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Feel committed and invested
Why it works:
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The buyer gets more for their money
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The seller benefits from upfront cashflow and stronger client loyalty
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It encourages repeat business without having to resell each time
This model works well for:
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Coaching sessions
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Consulting hours
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Design or content packages
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Product bundles or top-ups (e.g. salons, spas, printers, even cafés)
See also
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