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 couches, 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 percent said they’d rather spend their money on an experience or event than a product. About three quarters of respondents 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.
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!
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 got an iPhone 7? 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.
Or it may be that millennials recognize 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 analyze 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 pants 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. These ideas are discussed further in our new book The Intuitive Customer: 7 imperatives for moving your customer experience to the next level.
Would you rather spend your money on things or experiences? Tell us why in the comments section below.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX