Positive experiences feel better overall when we spread them out
Whether it’s binging on a box set or mindlessly consuming a whole bar of chocolate, we enjoy things more when split into multiple time chunks.
Thaler (1985). Mental accounting and consumer choice. Marketing science, 4(3), 199-214.
The study
87 students were told that two men won in lotteries: Mr A won $50 in one lottery and $25 in another. Mr B only entered one lottery and won $75. The students were then asked who they believed to be happier.
Results showed that students believed the segregated Mr A to be happier with his winnings.
Thaler (1985). Mental accounting and consumer choice. Marketing science, 4(3), 199-214.
Key Takeaways
Segregate the good.
Two small gains trump one large one. Be it team victories, feature announcements, product packaging or loyalty benefits, where can you break up the good into smaller, bite-size pieces?
Highlight silver linings.
Separate a small gain from a larger perceived ‘loss’ to reduce consumer pain. For example, instead of offering a temporary price reduction, offer a special rebate equal to the proposed discount.
Don't separate too small. We have a low-end threshold below which we experience no joy (Morewedge et al., 2007). Breaking a cookie into crumbs results in almost zero joy. Banks offering current account holders low monthly 'loyalty rewards' would do well to reframe them into larger, more meaningful chunks, or not do it at all. After all, no one wants to be reminded of the meaninglessness of their loyalty.
In further detail
Positive experiences feel better overall when we spread them out
Whether it’s binging on a box set or mindlessly consuming a whole bar of chocolate, we enjoy things more when split into multiple time chunks.
Thaler (1985). Mental accounting and consumer choice. Marketing science, 4(3), 199-214.
The study
87 students were told that two men won in lotteries: Mr A won $50 in one lottery and $25 in another. Mr B only entered one lottery and won $75. The students were then asked who they believed to be happier.
Results showed that students believed the segregated Mr A to be happier with his winnings.
Thaler (1985). Mental accounting and consumer choice. Marketing science, 4(3), 199-214.
Key Takeaways
Segregate the good.
Two small gains trump one large one. Be it team victories, feature announcements, product packaging or loyalty benefits, where can you break up the good into smaller, bite-size pieces?
Highlight silver linings.
Separate a small gain from a larger perceived ‘loss’ to reduce consumer pain. For example, instead of offering a temporary price reduction, offer a special rebate equal to the proposed discount.
Don't separate too small. We have a low-end threshold below which we experience no joy (Morewedge et al., 2007). Breaking a cookie into crumbs results in almost zero joy. Banks offering current account holders low monthly 'loyalty rewards' would do well to reframe them into larger, more meaningful chunks, or not do it at all. After all, no one wants to be reminded of the meaninglessness of their loyalty.
In further detail
Positive experiences feel better overall when we spread them out
The study
87 students were told that two men won in lotteries: Mr A won $50 in one lottery and $25 in another. Mr B only entered one lottery and won $75. The students were then asked who they believed to be happier.
Results showed that students believed the segregated Mr A to be happier with his winnings.
In detail
Scarcity
We value things more when they’re in limited supply
Social Proof
We copy the behaviors of others, especially in unfamiliar situations
Prospect Theory
A loss hurts more than an equal gain feels good
Reciprocity
We’re hardwired to return kindness received
Framing
We make very different decisions based on how a fact is presented
Loss Aversion
We feel more negative when losing something than positive when we gain it
Self-Expression
We constantly seek out ways to communicate our identity to others
Default Effect
We tend to accept the option pre-chosen for us
Priming
Our decisions are shaped by memories recalled from things just seen or heard
Anchoring
What we see first affects our judgement of everything thereafter
Autonomy Bias
We have a deep-seated need to control our situations
Fast & Slow Thinking
We make knee-jerk spontaneous decisions that can cause regretful damage
Status Quo Bias
We tend to stick with our previous choices, even if the alternatives might be better
Dynamic Norms
We’re more likely to change if we can see a new behavior developing
Round Pricing Preference
We prefer and trust whole numbers over those ending in a 9
Salience
Our choices are determined by the information we're shown