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February 12, 2013

The Value of Memorable Customer Experiences

by LeeD

Daniel Kahneman: The Riddle of Experience vs. Memory

In his 2010 Ted Talk, “The Riddle of Experience vs. Memory,” Nobel laureate, Daniel Kahneman, argues that people perceive reality in two disparate yet interconnected ways:  (1) the experiencing self, and (2) the remembering self. The first, experiencing self, lives in the present. It answers the doctor’s question, “Does it hurt when I touch you here.” The second, remembering self, maintains the stories of our lives. It answers the doctor’s question, “How were you feeling last week.”

Although, Kahneman’s talk discusses how these two selves perceive happiness (i.e. the difference between happiness with an experience and memory of that happiness), it is an equally provocative framework for evaluating customer value. In class, we discussed the importance of defining the touchpoints of company-customer interactions via controlled experiences. However, this neglects the power of memory in shaping customers’ perceptions insofar as it fails to distinguish customer experiences focused on the experiencing self from those focused on the remembering self. Given that customers’ happiness with an experience is fundamentally different from their memory of that experience and their purchasing decisions are informed in large part by those memories—that is, the remembering self—rather than the original experience, the greatest value lies in creating memorable customer experiences. This refined conceptualization of the customer experience would, for example, account for why customers have greater loyalty to companies that have recovered from mistakes as opposed to those exhibiting immaculate execution from the start.

Questions for further consideration:

(1)  Is the memory of an experience more meaningful to customers than the experience itself?

(2)  What makes a particular customer experience more memorable than another?

(3)  Do current metrics measure customers’ experiencing selves, remembering selves, or both? How should they be targeted?

 

-Lee D.

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