Thursday, December 27, 2007

Stumbling on Happiness

Stumbling on Happiness is a fantastic book on Psychology that discusses some interesting phenomena in human behavior that effect our pursuit of happiness. The author, Daniel Gilbert, previously wrote fiction before becoming a professor at Harvard. I picked out a few marketing implications from the book.

We tend to think of money in relative terms. People will drive across town to save 50 dollars on a television but they won't to save 50 dollars on a car because it is a small amount relative to the purchase. Consumer's judge their satisfaction of a toaster by relating it to the other toasters, which is why value increases when high end toasters are offered next to average toasters.

Studies have demonstrated that we are happier with things we are stuck with. We tend to value something much more after we own it than before we own it. We tend to enjoy something much more when we had to endure pain to acquire it (think standing in line for hours for the iPhone).

Our memories of past experiences are inaccurate and can be affected by our attitudes. If we think an experience should be great, we tend to remember being more satisfied than we actually were. We also tend to remember bad experiences more vividly, which is why everyone tends to think that grocery lines slow down as soon as join them.

He also argues that we are very poor at predicting our future satisfaction. If you had to predict your satisfaction at a new restaurant, you would be much better off by listening to a random customer's review than to make your own prediction by looking at the menu.

There's a lot more in the book so I highly recommend you pick it up.

2 comments:

CresceNet said...
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Punit Sethi said...

Hey, I did get this book from the library and read first couple of chapters. Interesting it is.

Off late, I've been excited by impact of psychology on business in general (not just marketing but many other aspects). Any other reads you have come across in this direction?

Thx
Punit.