Marketers talk about leaving money on the table. This post isn’t about marketing.
If you aren’t hip to sales speak, you might not be familiar this this expression, so here’s a really quick explanation:
Hypothetical Dude has $500 burning a hole in his pocket. He goes someplace where people sell stuff. He doesn’t tell anyone about the money in his pocket, but they can see the hole and the smoke. They know the money is there, but they don’t know how much of it there it. Crazy Eddy loves the smell of pocket smoke, so he approaches Hypothetical Dude and prepares to make a deal.
[…fast forward through a lot of boring dialogue…]
HD decides to buy because he’s worried about scarring from the 3rd degree burn on his thigh. CE can tell the time is right, so he names a price – $100. When HD reaches in his pocket to pay, CE can see that HD was clearly prepared to pay more. If CE had named a higher price – $200, $300, maybe even up to the full $500 – HD would have paid up with no hesitation.
Crazy Eddy has just left money on the table. Money was available, but he didn’t take it.
I’m sure you can find a more sophisticated and thorough explanation of the concept somewhere else, but as I noted above, this post isn’t about marketing. It’s about leaving money on the table.
You see, marketers (some of them anyway) are pretty clever, and the good ones are all about getting a maximum ROI on CPC (Return On Investment on the Cost Per Customer). Leaving money on the table means that you’ve failed to maximize your ROI. This is a sin.
But this isn’t about marketing.
I find the notion that leaving money on the table is a sin very interesting. The fact is, when money gets left on a table, it makes people uncomfortable.
To continue the example above,
Hypothetical Dude, though happy to get a bargain, probably left Crazy Eddy’s shop slightly uncomfortable. Sure, the burning in his pocket has subsided (mind you, this is only temporary, because he’s still got $400 in there that he knows is going to start burning again soon). But he might doubt his purchase – did he get scammed? He was prepared to pay more, but the low price caught him off guard, and now he worries that he might have bought an inferior product. You can bet he’s going to keep that receipt and won’t hesitate to return the stuff if he suspects there’s something wrong with it. That’s not good for CE either.
Also, keep in mind that he knows the rest of the money is going to start burning again soon. His so-very-recent stuff purchase is already unsatisfying simply because it only offers temporary relief. The dissatisfaction is compounded by the fact that he’ll have $100 less to work with on his next stuff-buying expedition. He might find some certifiably primo stuff at $401, and be unable to afford it. He’s screwed, and it’s all because Crazy Eddy left the money on the table by quoting a too-low price.
Again, this isn’t about marketing, and it’s not about pricing either, because that’s a very complicated science and art that I’m not very knowledgeable about.
This post is about the phenomenon.
Leaving Money on the Table
Try this experiment: leave some money on a table.
Just try it and see what happens. Go to the local food court a little before the lunch rush and leave some money on a table in plain sight. It doesn’t really matter how much. A few cents, a dollar, whatever. If you’re feeling adventurous and can stand losing it, try a few times with varying amounts.
[If you can’t stand the thought of giving money to total strangers, try it at a party or in your office. You can learn a lot about your coworkers for sure.]
Watch people. See how they react.
Notice how people react differently to seeing coins left unattended versus paper money. Paper money is serious!
If you can spare it, try with a twenty versus a pile of singles. When I did this, the singles went untouched in plain sight for quite a while – probably because a pile of money is conspicuous, and people start looking around for a hidden camera or something.
I find this experiment endlessly fascinating. Unfortunately, my budget is un-endless, so I could only spare about $100.
A Cheaper Version of the Experiment
Even if you’re a total cheapskate, you can try this out without having to actually waive goodbye to any cash.
Put together a wad of cash. You can use any denomination you like, but don’t take a pile of singles and wrap them in a couple of twenties, because that just looks suspicious, and your friends will know something is up. I usually just grab whatever I happen to have in my wallet and then put the cash in my pocket. Sometimes it’s a lot, sometimes not, but the effect is still interesting.
Go out to eat or drink. When you sit down, take your wad out of your pocket and nonchalantly place it on the table. Then just leave it there.
This drives people fucking crazy!
Different people have a variety of responses, but you’ll notice that having money on the table makes your friends, passersby (if they notice), your server (if you’re at a restaurant), and anyone else who can see it mildly to extremely uncomfortable.
They might wonder if you are trying to send them a signal of some sort.
Perhaps they’ll be afraid of somebody stealing it.
They probably won’t be sure if you put it there intentionally or just forgot to return it to its proper location in your pocket.
Whatever they’re actually thinking at this point, you can count on one thing: when you finally move to pick it up after a few minutes, everyone will breathe a collective sigh of relief.
Even though money left on the table (whether by pricing something too low, failing to up-sell or follow up, or whatever) is a sin, you can learn a lot from it.
Early in my marketing career, I had some success and wrote about it on my personal blog. Word got around, and a lot of people visited the site. I had nothing to sell them. Several well-intentioned friends warned me that I was leaving money on the table and that I had better get something going fast – at the very least I should have turned my last blog post into a FREE REPORT to give people for opting in to my email list. But I didn’t even have a list!
What was I thinking leaving all that money on the table!?!
It’s cool. I got to see what happens, and now I now something that very few other internet marketers on the planet know – what precisely happens when you are positioned in every way to sell something, but make no move to do so. I now know exactly how several hundred people in my sphere of influence react to seeing money left on the table.
If you haven’t yet, you can sign up for my list below.
But I’m not promising anything, and it may very well just be a social experiment.
[UPDATE] Nope. You can’t. I nuked the list. If you want golden nuggets of wisdom, follow me on Twitter. If you want to work together, figure out how to get in touch.