There seems to be a tacit assumption that when budgets get tight customers are attracted to discounts and lower prices. I have argued elsewhere that when people focus on price they tend to become more indifferent to the brand, the company and the experience. The net result is they are less committed or loyal.
In just completed research (soon to be published in the Journal of Positive Psychology), psychologist Ryan Howell makes an interesting point. People get more happiness or positive emotions from experiences than from things. People get a feeling of invigoration or inspiration form experiences that yields more positive emotional memories, sort of a return on investment.
Also, a positive emotional response is not tied to how much you spend; it is related to the experience itself.
Howell says that it is not that material things don’t being any happiness. It is that they don’t bring as much. He says you might be happy with a new TV but you get thrilled with a vacation.
My view is that you might be happy at the moment you buy a new TV but that is not related to the material item, rather to anticipation of using it. Take it a step further, if you buy a new TV and never plug it in, how happy does that make you?
What’s the take away from this post? Even it a recession when budgets are tight, people are attracted to positive emotional experiences. They will scrimp on things of less emotional value to be able to splurge on experience that up lift their spirits. They get an emotional ROI and this is remembered.