Following my call for action of a few articles ago I’ve decided to do something about it.
Since the industry won’t listen to me faster and set up new ways of studying how their customers truly feel about money I’ve decided I’ll take it upon myself to execute on “Emotional Banking”. Granted, nothing will be valuably scientific and my research utterly and despicably empirical but hey, beats nothing.
The only rule – question everything.
Spenders and Savers
For instance, why is it that in the rare cases when we define users for our journeys we accept in finance we can use the same data to build personas as in retail? Why not ignore age, gender and occupation and start by splitting people into Savers or Spenders. Isn’t that much more relevant for our purposes?
Then maybe we can see what each values. Whether it is time or money, what makes them tick, check if indeed Spenders value instant gratification and if Savers are more willing to delay it and if so why.
I spend a lot of time thinking of saving as my readers may know. I’m a Spender without a doubt but one that wants to grow up to be a Saver.
My obsession with this topic started when I helped design To Buy or Not to Buy, Meniga’s Finovate winning concept helping people make purchase or saving decisions. (You can see a demo of it here) It was aimed at creating a mechanism to transform impulse spending into impulse saving instead and it did so by injecting enough information into the decision making process (it allowed users to check if they have enough money for the purchase, to see if they had budgeted for it, etc) but also by making it emotionally engaging (one could crowdsource the decision to their friends on social media if they so chose and more importantly, they could see physical representations of their major savings goals to remind them what the value in saving instead would be).
Sadly this is the banking industry where we all get excited about things (the concept won Finovate’s Best of Show) but do very little about anything – the app is not live anywhere in the world today so we really have no way of knowing if it would have revolutionised the way we spend. If you think that is too big a claim look at the way Tinder changed the way we date.
The act of buying
Now what makes someone more likely to spend than others? What is it that makes a Spender? Is it the act of buying or the owning of the object that they are deriving more pleasure from?
The other day my nanny beamingly informed me that we can likely go through the entire summer without buying my son any new clothes. To her this was good news. To me, it sounded preposterous and sad. I would have more wanted to hear he has outgrown every item of clothing and we need to replace his whole wardrobe. It was going to be majorly expensive but hey, needs must. When she informed me of the opposite I felt loss. It made me question what it was that I would be missing on, why could I not share her enthusiasm at saving all that money. Turns out I had looked forward in my head to the trip where we spend an entire afternoon half listening to his preferences on whether or not T-shirts need to feature Transformers to be approved and half picking up things he “needs”. Dragging a half reluctant child through overcrowded stores and then handing hard earned cash was a price I was more than willing to pay for the experience of molding his taste, spending time listening to his ideas and feeling like I’m setting him up with necessary things as any good parent should.
So I propose this as a hypothesis: sometimes we buy experiences not things.
Here’s another example -and as I warned you, they are utterly anecdotal- I was speaking to some of my closest girl friends about buying behavior (yes they are FinTech geeks themselves, of course) and while one in particular deserves her own episode in this study as is a hard core Saver and extreme anti-Spender and I am still studying her before I can work out why that is, the other two heard me confess to a somewhat bizarre behavior and could relate to it!
Sometimes, I fill my basket up online and never check it out. On some sites, such as eBay or Amazon I end up having what is effectively a glorified wish list and I very rarely if ever, buy any of those products because in the cold light of day once I’ve cooled off from imagining I will take up yoga I never need the bejewelled mat I had clicked on. Why not have a list instead? Good question, something about a wish list makes it feel less actionable, like a recognised fantasy whereas I want to feel as close to buying that as I can without actually forking the money for it. A really interesting app called “Wish” goes even further –intentionally or not- in feeding my need for instant gratification and features an aggregated view of really cheap Chinese products – clothes, shoes, tech items- and I find myself loading them all into its basket idly as a past time. I never bought anything from them.
Imagine my surprise when I confessed this and my friends exclaimed “me too!”
The reality of it is that the only “happy money” is in savings. The satisfaction we get from spending is almost always marred with the subconscious buyer remorse we all experience to a degree or other but at the same time money enables momentary delight and the allure of paying for delight will never go away. Savings would need to be perceived of far greater value to equal it.
I’m still asking the industry to please find a way to get me addicted to savings like I was writing here last year but needless to say not much has appeared meanwhile.
In another episode I’ll look at what crowdfunding sites such as Kikstarter or Indiegogo teach us about delayed gratification and whether we can make investment exciting but for now I’d love to hear from you all – are you a Saver or a Spender and what makes you one?