Mental accounting is a fascinating strategy that helps us understand how people allocate their resources, such as time, money, and energy, and how this influences their buying behavior. Every customer virtually keeps a book about various “mental accounts” that represent their budget for different areas of life. This insight offers a golden opportunity to design offers and incentives in such a way that they target precisely these mental accounts, minimizing the so-called “payment pain” and thus increasing the willingness to buy.

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Let's look at the example of travel planning: The way we spend our money on travel varies greatly depending on which mental account we're currently using. While one person pays strict attention to the budget when buying a flight ticket, the other may be more willing to dig deeper into their pockets for added convenience. Interestingly enough, the same person who saves on a direct flight could invest in a business class upgrade without hesitation because this expense comes from the “comfort account” and thus serves a different mental category.

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How can this knowledge now be used for digital marketing? Upselling and cross-selling are the magic words here. When customers are already in a buying mood, it often reveals that they are willing to spend money — possibly even on a higher-value product or additional services that fall into the same or another mental account.

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Another exciting strategy is “bundling”, i.e. bundling products. By combining items from different mental accounts, you can reduce payment pain and increase the incentive to buy.

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“Framing” or framing is another effective way to take advantage of the benefits of mental accounting. For example, if you want to sell a bag, it could be much more effective not simply to present it as a “bag,” but as a “timeless statement of personal style.” In this way, you directly address the “Personal Image and Fashion Awareness” account, which means that the bag is no longer just an accessory, but an investment in personal style and self-image.

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So what can you take away from mental accounting for your brand? By cleverly allocating your customers' spending to less painful mental accounts, you can not only increase their willingness to buy, but also increase your sales. It's about positioning and communicating offers in such a way that they appeal to the specific mental accounts of your target group and thus offer real added value.