Saver's remorse: Another reason to start spending ~ Brand Mix

Wednesday, March 25, 2009

Saver's remorse: Another reason to start spending

Watch out those of you who are ignoring our President's pleas and (voluntarily) cutting back on spending. You may feel pretty good about yourself right now but there's such a thing as saver's remorse to worry about.

John Tierney, in a The New York Times article called: "Oversaving, a Burden for Our Times" says saver's remorse is the regret about not buying things, the mirror opposite of buyer's remorse. Says Dr.Kivetz from Columbia University who has been researching this area: "People feel guilty about hedonism right afterwards, but as time passes the guilt dissipates. At some point there's a reversal, and what builds up is this wistful feeling of missing out on life's pleasures."

Some people so habitually prepare for the future rather than enjoy the present that they have earned a label: "Hyperopic" (the opposite of myopic). The good news is that this is a manageable condition and we marketers can help. Kivetz has shown that people will change their shopping behavior with a little prompting. When he asked shoppers to imagine how they would feel about their purchases in the distant future rather than the following week, they ended up spending more money and bought more indulgences like jewelry. (Without this prompting, they bought practical stuff like socks.) He had managed to shift the shoppers mindset and got them thinking more about saver's remorse than buyer's remorse.

In another experiment, and tapping into the fact that hyperopically-minded people often recognize that they have a problem, Kivetz explored ways to help them "precommit to indulgence." What he found is that if offered the choice between cash and "hedonic luxuries" like wine or vacations, the majority chose the luxuries even when cash was the better deal. One of the participants is quoted as saying: "If I took the cash , it would end up going into the rent." Whereas the offer of luxuries was forced pampering.

Has there been any marketing recently that's tapped into these behaviors? Is such an approach possible at the moment or do we need to wait a bit before we start imagining a brighter, more indulgent future?

1 comment:

Jeffry Pilcher said...

Time will tell whether consumer behavior is only shifting temporarily or if it has fundamentally changed over the long term. Of course, it hinges on how long and how deep the recession runs. There is still a reasonable chance that consumer behavior could be affected for a generation (or even two), much as it was following the Great Depression. (Note: I didn't say "likely" chance, just "reasonable." It is within the realm of possibilities.)

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