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The happiest way to spend your money

Colin Shaw
Founder and CEO
Beyond Philosophy

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Colin Shaw is recognised as a global thought leader on customer experience, and pronounced by LinkedIn as one of the top 150 Business Influencers worldwide.

This article originally appeared on Colin’s blog at Beyond Philosophy. You can read more on these ideas in his new book The Intuitive Customer: 7 imperatives for moving your customer experience to the next level.

There's more satisfaction to be had from memorable experiences than 'things'. Brands... take notice

A lot of people give the millennial generation a hard time, but when it comes to customer experience, the millennials’ thinking is spot on.

While we older folks spent our 20s and 30s buying new sofas, bigger houses and fancier kitchen gadgets, millennials are spending their money on concerts, vacations and dinners with friends.

In a survey for the event promotion site Eventbrite, 78% said they’d rather spend their money on an experience or event than on a product. About three quarters of people said they’d made some of the best memories of their lives at live events, and a similar number said that going to live events deepens their relationships with family and friends.

As a customer experience consultant, this tells me that millennials understand something very important about happiness and customer experience, and if retailers and brands don’t listen they’re going to struggle.


Over time, our satisfaction with the things goes down, while our satisfaction with experiences goes up


The thing that millennials seem to get has been described by Cornell University professor Dr Thomas Gilovich, who has been researching the connection between money and happiness for longer than some millennials have been alive.

As Gilovich explains it, we buy new things to make ourselves happy, but then we get used to them and their effect diminishes. That new TV is amazing for the first month or so, but then it’s just a TV. His research suggests that we’re equally happy with money spent on things vs. experiences at first, but that over time, our satisfaction with the things goes down, while our satisfaction with experiences goes up.

Items that we buy are always separate from us, while experiences become a part of who we are, Gilovich explains. Even bad experiences become better when people share and talk about them. That time you lost your phone and missed the train and had to walk two miles along the railroad tracks in the sleet was terrible when it happened, but it makes a great story later!

Girl_on_top_of_Machu_Picchu

People bond over shared experiences more than shared things: “Oh, you’ve hiked Machu Picchu? I just got back from there!” is the start of a great conversation. “Oh, you've got an iPhone X? Me too!” Not so much. In addition, material possessions invite head-to-head comparisons that can leave people feeling inadequate, while experiences are harder to compare because they’re so individual.

There are several theories about why millennials are so interested in experiences. They may have watched their parents accumulate possessions but not happiness. It may be the influence of social media, or the fear of missing out on something fabulous.


Good memories lead to loyalty. Bad ones are unlikely to bring repeat business


Or it may be that millennials recognise that as human beings we value emotional connections. In our customer experience consultancy, our research has consistently found that consumers’ experience is shaped by their emotions more than any other factor. We’ve developed an Emotional Signature tool to analyse how this plays out at any given point in the customer’s journey. And a key factor is the memories that an experience produces. Good memories lead to loyalty. Bad ones might make a good story, but they’re unlikely to bring repeat business.

Experiences are rich in memories. A trip to a department store to buy a pair of shoes can be about as memorable as brushing your teeth.

These ideas are especially hitting home in the retail sector where buying things has traditionally trumped having experiences. It may be that the retailers who find ways to give customers a unique and memorable experience are the ones that come out ahead.

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