Inside the Consumer Mind

Understanding the rational and emotional foundations of consumer behavior

How Memories of Experience Influence Behavior

Which product experiences will bring luxury brand consumers back again?

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At a recent TED conference, psychologist Daniel Kahneman, Nobel Prize winner and one of the founders of behavioral economics, gave a talk on why our experiences and our memories can be so different.1 His concept provides important insights about all consumers, but especially for those who purchase luxury brands.

For example, a consumer could have a great experience with a product or service, but only have bad memories when thinking about it later. Here’s how. Let’s say you are on vacation and have dinner at the best restaurant recommended to you. Perfect table. Food is exquisitely prepared. Wonderful wine. The experience is fantastic. However, when clearing the table the waiter spills coffee into your lap. Odds are that the coffee spill will degrade your memory of the food and wine, no matter how exceptional you otherwise would have remembered them. And if the hot coffee burned a leg or damaged an expensive dress or suit, the wonderful dining experience may not be remembered at all.

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Kahneman points out that the decisions we make are based on our memories, not our experiences. So for that restaurant, your memory will have negative consequences. Not only will it prevent you from returning, it will be shared with all of your friends who ask about your dinner.

This distinction between experience and memory is especially important as related to luxury brands. Unlike supermarket products and neighborhood restaurants, for which price, utility, and availability are important; the vital ingredient for success in luxury product and service segments is consumer experience.

Advertising executive Andrew Sacks works with clients in the affluent market. Recently, Sacks gave a presentation at an industry conference in which he discussed the importance of "experience" in the luxury market. Most consumers have a list of things they would like to purchase. However, affluent consumers are more interested in deeper and more meaningful experiences in their interactions with the products and services they buy. 

Day-to-day living and long-term quality of life are important elements of Kahneman’s thinking. These values are expressed in his concept of the “two selves”—the “Experiencing Self” and the “Remembering Self.”

The Experiencing Self lives in the present, processing current inputs and information from the physical and social environment. Life is a continuous series of moments of experience. Once these moments are passed, however, most are lost forever. Many don’t even leave a trace. Kahneman calculated that the psychological presence of an experience lasts about three seconds.

To us, every moment of our life seems precious. What we do minute-to-minute is important to our existence. These experiences should make up the story of our lives. But they don’t.

The story of our lives is written by The Remembering Self. But if almost all of our continuous moment-to-moment experiences are lost, what is remembered? What is the content of our stories?

Kahneman’s research reveals that the experiences we remember are defined by change. Our stories are made up of experiences that are new, novel and those that have greater significance. In addition, our Remembering Self likes endings—how episodes and other individual experiences conclude. Thus, in the restaurant example, the spilled coffee dominates the story of an otherwise enjoyable dining experience.

Kahneman cites travel as a great change-inducing experience. Because travel provides an ongoing supply of new and novel experiences, it is an almost perfect memory-making activity. It is a guaranteed path for the affluent to achieve their goal of long-term quality of life.

The lesson for luxury goods marketers is that they need to satisfy the needs of the Experiencing Self so that consumers are drawn to them; while they also provide experiential change that the Remembering Self can use to create memories which will bring those consumers back again.

Luxury automobiles are a good fit for the Experiencing / Remembering Self approach. Luxury cars are full of features and accessories that delight the Experiencing Self. The Remembering Self, however, needs more help. Sacks gave an example of an experiential change that can affect memory—the transformation of the luxury dealership from an ordinary car showroom to a multi-dimensional “temple.” Transforming the showroom’s sensory experiences and elevating the quality of interaction between dealership personnel and the consumer are changes that likely will be remembered.

Kahneman made the following distinction about how experience and memory affect our future behavior: “We actually don't choose between experiences, we choose between memories of experiences. And even when we think about the future, we don't think of our future normally as experiences. We think of our future as anticipated memories.”

Think about it.

 

1 Kahneman’s presentation at TED can be found online HERE

Peter Noel Murray, Ph.D., is principal of a consumer psychology practice in New York City. Dr. Murray's specialty is the psychological drivers of consumer behavior, with emphasis on emotion.

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