Belonging, Cults, and Loyalty

03.07.2017 |

Episode #1 of the course Consumer behavior: Becoming an empowered consumer by Maureen McGuinness


Welcome! Thanks again for devoting your time and effort to becoming an empowered consumer.

Do you own an iPhone?

If you don’t, do you know anyone who owns an iPhone?

Chances are you do. As of April 2017, the number of iPhone users in the US is 85.8 million, accounting for nearly 43% of the US smartphone market. So, how does Apple manage to attract and retain so many customers?

In the first part of this course, we will explore key studies on consumer psychology to highlight external factors that impact our spending decisions. In the second part, we’ll cover psychological exercises to help us spend less money and explore our own psychological barriers that convince us to spend more than we need to. The final part will show you how to apply what you’ve learned.


Maslow’s Hierarchy of Needs

In 1943, Abraham Maslow released a paper theorizing that we are motivated to achieve certain needs.

Since many of us in developed countries are fortunate to be mostly able to address our basic needs, much of our focus shifts to addressing our psychological and self-fulfillment needs.

We may believe that we like to be treated as individuals; however, research tells us the opposite: we like being labelled (as long as our label is positive, e.g., premium customer), and we are more inclined to participate in our “group’s” message if we feel included. Being labelled addresses our need to belong and our need to have prestige. Being labelled makes us more receptive to our “group’s” message because it helps our brains to maintain a sense of consistency.

There are two hooks that convince us to “belong” to a “group” and purchase products from a specific company:

1. Cult-like quality. We’re naturally competitive, so companies openly communicate who their rival is. For Apple, that means talking about Samsung when talking about iPhones or talking about the PC when talking about Macs.

2. Values. We’re enticed by a company’s values more than we realize. We choose to belong to a specific company because of what that company stands for. Apple prides itself on being innovative. We want to be innovative too, so we believe that Apple can help us achieve this.

Companies have also realized that encouraging responsible behavior can help attract and retain customers. Every bottle of Life Water funds at least 1000L of clean drinking water for a community in need. With every pair of TOMS shoes purchased, TOMS gives new shoes to a child in need. We purchase from a company because of we feel aligned to the company’s values or what they stand for.


Loyalty Programs

Have you ever been part of a frequent flyer program? Frequent flyers earn points when they travel within an airline alliance and have frequent flyer membership. The membership is free but airlines can use your free membership to encourage you to spend more than you may have otherwise. If you travel frequently for work, i.e., you collect points for flights paid for by your employer, being part of a frequent flyer program can be very lucrative. You can get cheaper flights for you and sometimes companions. If you’re using membership when paying for your own travel, you may spend more in order to move up the ranks of membership from bronze to platinum. As kids we like to be told that we’re special, and as adults we enjoy special treatment.

If you consider yourself a spendthrift, tomorrow’s lesson will show you how even the tightest of spenders can be convinced to spend money with subtle marketing tricks.


Recommended book

Cool: How the Brain’s Hidden Quest for Cool Drives Our Economy and Shapes Our World by Steven Quartz, Anette Asp


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