How do the best companies create a customer experience that generates joy, happiness, and fond memories? To answer that question, it’s useful to understand how our brains create memories.

Nobel-winning economist Daniel Kahneman explored this subject in a study about how people remember pain during a colonoscopy. He asked subjects to rate their discomfort during the procedure. Kahneman’s team then compared the patients’ “remembered” pain experiences with data recorded during the procedure.

The team found that subjects rated the pain of their entire experience based on only two points. …

Have you ever been in line at the supermarket and spied a candy bar display near the register? That’s because grocers know that the longer you shop in their stores, the less willpower you have, and the more likely you’ll be to throw that candy bar in your cart. After an exhaustive study, the United Kingdom recently banned unhealthy food and candy displays at checkouts for this reason.

Why is your willpower more likely to fail after you’ve spent an hour shopping? …

Shopping can be a feast for the senses — color, light, smells, and even taste put customers into a state of emotional arousal. One of the retailers best known for an engaging store experience is furniture retailer IKEA. Their stores are designed to put our emotions and senses into overdrive.

But did you know there’s a business reason to create more engaging store experiences? When customers are emotionally aroused, they become more open to impulse buying. Why? It’s down to a psychological principle known as the Gruen Effect.

What Is the Gruen Effect?

The Gruen Effect (also called the Gruen Transfer) describes the moment people enter a store and are engrossed in an intentionally overwhelming experience. This causes them to forget their original reason for going to the shop, so they tend to make more impulse purchases. Customers also lose track of time and become engrossed in this new experience. …

I’m so excited to introduce the Choice Hacking podcast, a weekly show dedicated to exploring the ways behavioral science and psychology intersect with experience design, marketing, startups, and more.

We’re just getting started, but if you enjoy it, please consider subscribing and leaving a rating or review. Thanks!

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EPISODE SUMMARY

Have you ever experienced FOMO — the “Fear of Missing Out”? It’s a form of social anxiety that makes people scared they’re being left out of exciting or interesting events. It’s usually triggered by posts on social media, where it looks like the whole world is having fun without you. If you suffer from FOMO, you’re not alone. A recent study found that 70% of millennials experience the fear of missing out regularly. And there’s a powerful psychological principle behind why people experience FOMO — it’s called Loss Aversion. First identified by Nobel Prize-winner Daniel Kahneman, Loss Aversion is a psychological principle that says people will go to great lengths to avoid losing. In fact, the psychological pain of losing is twice as powerful as the pleasure of winning. …

Have you ever made a plan to go to the gym first thing in the morning? You had the best intentions the night before, but when the alarm clock went off at 5 am, you found a flimsy excuse to avoid your workout?

It’s not just an early morning gym habit that people have a hard time following through on. It might be saving for retirement or avoiding sugar.

Why is it so hard to do things that we know are good for us in the long run but are uncomfortable in the moment? …

Founded by Sam Walton in 1962, Walmart is a retail juggernaut. Walmart is the world’s largest company by revenue, with $514.405 billion according to Fortune’s 2019 Global 500 list. The company employs 2.2 million people — that’s more than the population of New Mexico (and 15 other U.S. states).

Walmart’s reason to exist is value. Their entire brand hinges on “Everyday Low Prices,” and everything they do must deliver value for customers. That’s a promise Walmart delivers on, with shoppers saving around 15% on a typical cart of groceries.

Because of low prices, Walmart’s experience must deliver lots of sales

Walmart might have rock bottom prices, but to make those prices deliver profit for the business, they have to get customers in the door and convert them as effectively as possible. …

I’m so excited to introduce the Choice Hacking podcast, a weekly show dedicated to exploring the ways behavioral science and psychology intersect with experience design, marketing, startups, and more.

We’re just getting started, but if you enjoy it, please consider subscribing and leaving a rating or review. Thanks!

Listen and subscribe: Apple, Spotify, Amazon Music, Stitcher, Deezer, Pocketcast, Google Podcasts, and Simplecast.

Episode 103: Peak-end Rule

Have you ever had a terrible meal that was completely transformed by an amazing dessert? How about a great movie that was ruined by a bad ending?

Why do these moments have the power to stick out in our memories, and change otherwise good or bad experiences?

It’s down to a behavioral science principle known as the Peak-end Rule. …

Founded in 1943 by Ingvar Kamprad, IKEA sells ready-to-assemble furniture, appliances, and home accessories. What started as a vision to bring interior design to the masses grew to 433 IKEA stores operating in 52 countries. It’s been the world’s largest furniture retailer since 2008.

But did you know that IKEA uses psychology to help drive that success? Principles like Scarcity, the Endowment Effect, and the Priming Effect laid the foundation for the company’s success.