Humanity has long subscribed to the belief that “the more money I have and the more things I own, the happier I will be”. Logically this makes sense – buying and owning more things will surely amplify my life and increase my overall happiness, right? Increasingly though, this belief is changing. The science of why experiences are better investments than things is gaining traction and changing the ways we use our disposable income.
Traditionally, when people made purchase decisions, they made the very rational assumption that they’d be better off purchasing a physical object as opposed to an experience, based on the fact that an object will last longer and thus maximise their happiness, whereas an experience will be both fleeting and transient.
However, according to recent research conducted by Dr. Thomas Gilovich, a psychology professor at Cornell University, this assumption is incorrect.
“One of the enemies of happiness is adaptation,” says Gilovich.
He goes on to explain that the problem with buying new things is that the longer we have them, the more we adapt to them. Eventually they simply become a part of our daily routine – the newest iPhone 6s will be amazing for the first week or so, possibly the first month, but inevitably it will fade into the woodwork of our daily lives.
Gilovich suggests that instead of buying the latest iPhone or Audi, people will get more happiness and satisfaction if they spend their money on experiences, such as visiting museums, getting outdoors, going to lunch/dinner with friends, learning a new language, or travelling.
This line of thinking is closely mirrored by psychologist Matthew Killingsworth who argues that experiences bring people more happiness than possessions do. His study, published in the journal Psychological Science explores the impact of anticipation as a driver of happiness, concluding that:
When you can’t live in a moment, its best to live in anticipation of an experience. Experiential purchases like trips, concerts, movies, et cetera, tend to trump material purchases because the utility of buying anything really starts accruing before you buy it.
The thrill of waiting for an experience apparently provokes more happiness and excitement than waiting for a possession. Take a holiday to Italy, for example. Months are spent planning activities, like taking a Gondola through Venice, walking the Cinque Terre, shopping in Milan, climbing Mt. Etna and making a wish in Rome’s Trevi fountain. Waiting for the trip is infinitely more exciting and engaging than waiting for a new iPhone to arrive in the post – something that is more likely to have overtones of frustration and impatience.
Even negative experiences become positive memories after the event. When a skiing holiday is affected by constant whiteouts the argument will be “we spent quality time playing board games together and bonding as a family”, whereas if your computer freezes or crashes, nobody will make the case that they had “quality time” trying to restore their work. Negative experiences, while stressful or frustrating at the time, eventually become a funny story or an invaluable character-building experience.
Companies can no longer simply push products onto consumers; they have to sell products that consumers can relate to and that enhance their lifestyles.
Experiences can also yield higher levels of happiness compared to possessions because of the way they are consumed. Shared experiences bring people together, whether it’s a holiday to Bali with some friends or meeting someone at a party who has also been to the Rijksmuseum in Amsterdam. An experience you share with someone connects you to that person, and when you retell the story you always tell it with him or her in mind. Furthermore, these experiences add to our sense of identity and help define our individuality.
Then there’s the tendency to “keep up with the Joneses”. This is far less pronounced for experiential purchases than it is for material goods. It is infinitely easier to compare material possessions than it is to compare experiences. So whilst staying in a 5-star hotel might be a more luxurious experience, the more unique experience might be staying in a hostel in the heart of Fez’s souq, surrounded by the sounds, spices and culture of Morocco. Everyone experiences life differently and what appeals to one person might be completely different to what appeals to another.
How the corporate world adjusts to this need will be hugely important for their future survival. Companies can no longer simply push products onto consumers; they have to sell products that consumers can relate to and that enhance their lifestyles. This is something GoPro has successfully achieved. Watch any GoPro video on YouTube and the first thing that hits you is that they’re not selling their cameras – they’re selling the experiences that their cameras immortalise. GoPro has perfectly honed in on the power of experiences and as a result has created their own market category in which they are the undisputed leader. Closer to home, we can see this focus on the experience gaining traction within our restaurant industry. Establishments like Mexico have created unique service experiences that provide ambiance and value that go far beyond the food and drink we choose off the menu. Both GoPro and Mexico have moved away from the typical ‘push marketing’ strategy that is so prevalent in the world today. They have instead positioned their products as a means for people to realise the lifestyles they want to live – selling the experiences that their products accompany instead of selling the product itself.
Whilst possessions define our social status or worth, it’s our experiences that help define who we are. In the pursuit of happiness, our experiences will yield a far better return on investment compared to material goods and as such are a far better choice for spending our disposable income.
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