The Time versus Money Effect was notably studied by Mogilner and Aaker in 2009. They showed that people react much more favourably to sales pitches that make reference to time rather than money. We react much more positively to references to the time we will get to spend with a product over any mention of money (even if that is to say how much money we might save).
Mogilner and Aaker put forward several reasons to explain the Time versus Money Effect. Firstly, we have a much more personal relationship with time than with money so that an evocation of time we might spend enjoying a product creates a more immediate emotional and personal connection with this product, helping to increase our desire to have it. Thinking about the time we will spend allows us to project forward to our own personal experience of using or consuming said product. Time is also a rare resource, less replaceable than money – once time is spent, we can’t get it back – which increases its value. Therefore, if we think that using this product is a worthwhile way of passing our time then it will immediately go up in our estimations. Finally, by concentrating on our future use of this product and not on the price, we are less likely to really think about the monetary value of the product and whether it is in fact too expensive or overpriced. Studies have shown that the act of spending money really decreases our pleasure in purchasing (the Pain of Paying principle) so it is always more effective to concentrate on another aspect of the purchase.
Mogilner and Aaker conducted many experiments to test this principle. In one of them they split students from Stanford University who all had iPods in to 3 groups. The first group was asked “How much money have you spent on your iPod?”, the second group was asked “How much time have you spent on your iPod?”, and the third group wasn’t asked any preliminary question. They were then asked to complete questionnaires about their iPods and the first group, who had had their attention drawn to the amount of time they spent using their iPod, gave by far the most favourable opinions and feedback about the product.
The Time versus Money Effect is a principle that is very useful in sales and marketing strategies as it can be extremely effective to market your products from the angle of time customers will spend using them rather than concentrating on any financial offers or other price-based selling points.