Some say the mind is the most powerful weapon in the world, or the six inches that truly matter.
Imagine being able to bend people’s will and making them think, feel, and act as you want them to. If, as a business, you built a customer experience around an expected outcome, you can achieve exactly this. Here are the ways in which some of the world’s most successful businesses do exactly this, as can you.
The IKEA effect
Ever walked out of an IKEA store, and ended up wondering why you bought that thing you didn’t go in wanting to buy? IKEA has become a master of this, driving $50 billion in annual sales by guiding customers in directions they never knew.
IKEA’s entire business model is built on this; a 2011 Harvard study found people ascribe greater value to goods that they have to assemble themselves, and are willing to pay 63% more for it vs. something that comes pre-assembled. Unsurprisingly, it’s been dubbed the IKEA effect by psychologists.
IKEA’s locations also tap into your psyche. With their remote locations beyond the traditional boundaries of major cities, you walk in feeling you must make the most of your journey, because who wants a wasted trip, and who’s going to make a second trip if at all?
Importantly, IKEA taps into that most basic of human senses: smell. Our olfactory senses are a powerful trigger, and the Swedish chain softens the blow of spending hours at an outlet by drawing you in to their in-house eateries. After all, as IKEA’s founder Ingvar Kamprad said “You can’t do business with someone on an empty stomach.” These cafe’s allow shoppers to regroup and relax, but critically stay in store to buy more. And it’s not just furniture they’re buying either; IKEA sells 1B+ meatballs a year. Chew on that.
Apple and the ‘curiosity gap’
Every Apple product is designed to be an experience, right from the time you open the package. Why else is YouTube inundated with its unboxing videos? And think about it; you haven’t got rid of the box either, have you? It’s all by design.
While Steve Jobs understood the power of technology, he understood the power of human desire even more. As Jonny Ive recounts: “Steve and I spend a lot of time on the packaging. You design a ritual of unpacking to make the product feel special. Packaging can be theater.”
Apple has an obsessive detail to getting their packaging right, as it’s the first thing a customer experiences. Like a magician’s grand reveal, Apple’s products come encased in lush, high-end boxes that pause ever so briefly before the air pocket gives way to reveal the box’s contents. This sense of anticipation is what’s called the ‘curiosity gap’: a psychological need to close the information deficit between what we know and what we *want* to know.
The implicit understanding for customers is that if Apple is spending this much time on just the packaging, how much attention are they paying to the product? In a word, plenty. It harks back to a lesson Steve’s adopted father, Paul, told him: “You gotta make the back of the fence — that nobody will see — just as good-looking as the front of the fence. Even though nobody will see it, you will know, and that will show that you’re dedicated to making something perfect.”
Jobs was a master at getting the little details right to wow customers, and so can you.
Hermès and managing desire through scarcity
Amid Hermès’ $170B+ luxury empire, Birkin Bags occupy a special place. Each bag can cost upwards of $50k, and the record sale is $500k. That’s crazy by any objective measure, and it’s all because Hermes creates desire through the psychology of scarcity and demand. We always want that which we cannot have.
Hermès takes great care while crafting each bag by hand over 20-25 hours, with such high-end materials as leather, crocodile skin, and gold used. Only an estimated 12,000 bags see the light of day, with the company known to burn bas that sport the slightest defect. There are only 200,000 Birkin Bags in the world, a number put in perspective by the fact a relatively high-end brand like Coach sells more than 4 million handbags per year.
This makes the product highly sought after, and shoppers can’t simply walk into a store and buy one. Hermès has to *offer* them the chance to buy it. That’s crazy for a product that costs $50,000 at a minimum!
It’s not just the statement it makes either; the scarcity has made the bag an asset class in itself. A 2016 study found that Birkin — over the preceding 30 years — notched annual returns of 14%. That’s a lot to unpack.
Stay tuned as we being you more such psychological hacks that you too can apply to elevate your business.