Wired for Deals: The Scientific Benefits of Saving Money
Consumers carry big sticks these days.
Just ask anyone who's ever been tasked with online brand management. Nothing can bring a large corporate empire to its knees faster than an angry Tweeter with a couple thousand followers.
That consumer power is never more on display that this time of year. Most people are spending a lot right now, due to holidays and other year-end expenses.
Brands know that.
And consumers know that brands know that.
Which means they're content to wait for prices to tumble down. Most brands in turn have no option but to capitulate.
From a brand perspective, it's frustrating.
But have you considered it from the consumers point of view?
As it turns out, it's more than just practical to save money. A closer view shows biological reactions to finding a good deal - the same reactions we experience when our team wins a game or we connect with a good friend.
Conversely, saving money fights off some nasty reactions caused by financial-related stress as well.
Our Love/Hate Relationship with Money
Money permeates every aspect of our lives. It effects nearly every decision we make, from what we eat to the vehicles we drive, to bigger choices such as what career we go into and how many children we have.
Most of us don’t have a money obsession, per se, but we have no choice but to consider the cost and return on everything we do.
72% of adults report feeling stressed about money at least some of the time. 54% say they have “just enough” or not enough money to make ends meet at the end of the month.
It's getting worse, too. Over on the Access Perks blog, we uncovered a disturbing trend of decreasing take home pay since 2006.
Our love/hate relationship with money is wired deep. The stress of dealing with it eats deep into our brain’s production of Serotonin, Noradrenaline and Dopamine – the chemicals that regulate our energy, sleep cycles, and good feelings.
Offsetting that stress - by saving money or earning more - has a number of benefits, including better sleep, more energy, sharper awareness levels, and literally less pain.
It makes sense that 96% of us use coupons. They’re like a painkiller, of sorts. Saving money isn’t just a “nice thing” for people to do, it’s a necessary coping function.
The Emotional Benefits of Saving Money
Our intense worry about finances has brought about a renewed interest in saving money. With the American economy on unsteady ground for the last 15 years, frugality has become ingrained into consumers’ lifestyles. (Particularly Millennials, who have yet to experience a robust economy as adults.)
It isn’t going anywhere, either. In fact, consumers have discovered the emotional benefits of saving money.
- Saving money is fun. We’ve all experienced the joy of finding what we perceive to be an amazing deal. It’s a rush, and the brain rewards us with dopamine – the same chemical released when a favorite team wins a big game, or after a great date night.
Relevant stat: 81% of consumers find it fun to see how much they can save with coupons or loyalty cards (Deloitte)
- It makes us feel empowered. We’ve blogged a time or two on how it’s important for people to feel like they’re “winning” in their relationships. Saving a few bucks on purchases helps consumers feel like they’re getting the better end of the deal.
Relevant stat: 80% of shoppers say that using coupons makes them feel smarter (Inmar)
- We’re less connected to brands. This is where it really gets tough for the business world. In general, people have two, maybe three brands that they will buy regardless of price and outside factors. Every other purchase is at the mercy of their wallets. People are buying store brands more, brand hopping based on price, and outright walking away from brands that they feel haven’t recognized or rewarded them. People are also finding ways to spend less that have a greater overall benefit, such as cooking more at home and cutting back on non-essentials.
Relevant Stat: 9 out of ten consumers found several store brands that are as good as national brands (Deloitte)
Let Consumers Save on Cake, and Eat it Too
Coupons, discount programs, loyalty rewards – these are all effective tactics because they’re appealing to very real needs and desires felt by a near unanimous portion of society.
The brain pushes out a little dopamine every time a consumer interacts with those brands because it’s tied so closely to the positive benefit of saving money. The more a business can do to help a consumer stave off financial stress and enable that money-saving habit, the more they can solidify those conditions long-term.
If you're operating a B2C brand, don't shy away from coupons. Just be sure to use them with a laser focus and a clear goal.
For everyone else, helping people stretch their dollars out even by a small bit provides a clear path to their hearts - and minds.
(brain image courtesy of dierk schaefer)
Written by: Brandon Carter