Have you found yourself choosing to buy an experience over a thing? Are you more excited about an upcoming music festival where you can experience live music from your favorite bands with your friends than purchasing a band’s album?
Millennials now make up the largest age demographic and because of that, more studies are being done to better understand how they prefer to spend their money. One of the most notable conclusions is that millennials prefer to spend their money on experiences over stuff.
What does this mean for brands?
There is an increasing opportunity to capture and captivate your ideal audience through a highly designed brand experience that become wonderful memories for your customers.
Among my millennial friends and colleagues, I know this to be true. I have several entrepreneur friends who prefer to travel as often as possible instead of buying a home, fancy car, and things that would keep them grounded so to speak. Others still want a home base and choose to buy a small condo and spend the majority of their money on traveling for vacations and to experience the world.
These friends are not alone. A study conducted by the Harris Group found that 72% of millennials prefer to spend more money on experiences than on material things.
Researchers have been studying happiness and material possessions for quite a while now. The original assumption was that spending money on material possessions would increase happiness because they last longer than an experience. A 20-year study by Cornell University psychology professor, Dr. Thomas Gilovich found the opposite to be true.
In fact, developers are now creating entire co-living brandedworld’s for millennials who want all the luxurious amenities in a prime downtown location, but for a fraction of the cost. How? They simply rent out a private bedroom/bathroom within an apartment, gaining them access to a highly curated social setting within the complex.
Dr. Gilovich is one of just a handful of researchers who believe in the Easterlin Paradox, which states that after our basic needs have been met, money will only increase happiness to a certain point for the following reasons:
1. Happiness from material items are fleeting
We buy things to make ourselves happy. But that happiness is quickly fleeting, causing us to adapt to having the new product in our life. Over time, the excitement fades into the background. Experiences, like traveling, attending a Broadway show, an art exhibit, or trying a new restaurant become part of our identity, bringing us greater satisfaction.
2. Brand experiences define your purpose and passions
Your daily activities should be influenced by your purpose and passions, not material possessions.
Maybe you are a huge Hamilton fan, having memorized the entire album since it came out in 2015. Even though you have the album and have all of the words and impersonations down if you were offered a pair of tickets to see the Broadway musical and a chance to meet the cast, would you take it?
In other words, the experience of listening to the album is one thing, but witnessing and experiencing the musical in person is completely different. It further defines you and validates your passions.
3. Possessions don’t contribute to social relationships
What I love about traveling is that it is a shared experience. I’ve been on some wild adventures with colleagues that had us stuck on remote islands, canceled flights due to hurricanes, and having to navigate from central Japan to Tokyo using bullet trains. Those experiences created everlasting bonds with people I may otherwise
Those experiences created everlasting bonds with people I may otherwise would not have known. The experiences create stories, which keep us bonded together over time.
4. Moments are more memorable
While experiences are designed to be fleeting, they provide a high level of arousal and memorability thanks to anticipation. When you hear of a favorite comedian, entertainer, Broadway show is coming to your city, your senses heighten at the anticipation of experiencing the performance.
Planning trips, even short 3-day jaunts to the Bahamas become memorable moments. As the days get closer to the trip, anticipation builds, creating a high level of arousal around the future trip. Organizations
Organizations that can tap into this heightened anticipation for their products are designing a brand experience for their customers. Apple does this extremely well as they built anticipation around their WWDC conference earlier this month.
5. Brand experiences introduce you to a whole new world
Unlike stuff, experiences allow you to take in new perspectives, life lessons, and gratitude. When traveling, you are immersed in new cultures and different ways of doing things. New perspectives can greatly shape your current views, allowing you to appreciate what you’ve accomplished, where you are headed, and how you can get there.
Brand experiences can also introduce you to a new world within a world. Networking with business-minded people can be challenging. It’s often hard to find serious, ambitious, and meaningful business people at networking events hosted at a bar. Most people are there for the free or cheap drinks and to make small talk. The experience isn’t so great.
But when you become immersed in a social business club, your experience completely transforms. No longer are you stuck making small talk, but meeting with high-powered decision makers who want to take their brand to the next level. While few know about social business clubs, they are like a secret world within major cities.
6. Hoarding can lead to an increase in stress
Over the last few years, I’ve been intentionally getting rid of things and limiting stuff that I buy. By eliminating stuff, there is less to manage, less to maintain, less to store.
In fact, when our homes are filled with clutter, it increases our levels of stress.
7. Keeping up with the Kardashians (or Jones’) is never ending
When you think of the Kardashians or that friend that has all of the latest luxury things, it can get overwhelming if you let yourself try to catch up constantly. The thing is when you get stuck in constantly updating material possessions, you miss out on experiences and relationships that you could be building.
One of the reasons why people compare their material possessions against others is that it is easy to do. You can break down the features and see how they stack up. With experiences, it’s harder to compare. It can be bothersome to hear about someone taking a first class flight, but it doesn’t produce as much envy as material goods.
Adding an Experience to Your Organization
Knowing that consumers are shifting towards purchasing experiences over material goods, there is an opportunity to design experiences that enhance your products/services. Something as simple as a customer appreciation event could be the way to immerse your clients into your brandedworld, creating a memorable experience that they enjoy and look forward to each year.
Enjoyed This Post? Share it With Others!
Do you prefer material goods or experiences? Leave a comment below or connect with me on social and let me know!
Connect with me on Social