DeepSummary
In this episode of the Choice Hacking podcast, Jennifer Kleinhens examines how the coffee chain Starbucks used applied behavioral science and psychology to become the world's biggest coffee shop. She explains that Starbucks' expensive pricing signals high quality to customers, a phenomenon known as the "rational value assessment." The company also creates a feeling of exclusivity and FOMO through limited-time offerings like the Pumpkin Spice Latte.
Kleinhens discusses how the Starbucks app improves the customer experience by eliminating pain points like waiting in line to pay and pick up orders, leveraging the "peak-end rule" principle. She also highlights Starbucks' strategy of allowing customers to customize their drinks, tapping into the "IKEA effect" where people value products more when they co-create them.
Overall, the episode unpacks various psychological principles that Starbucks has leveraged, whether intentionally or not, to build an extremely successful global brand and customer experience. Kleinhens encourages businesses to consider applying similar behavioral science strategies.
Key Episodes Takeaways
- Starbucks prices its coffee at a premium to signal high quality and value to customers.
- Limited-time and seasonal offerings like the Pumpkin Spice Latte create a sense of exclusivity and FOMO.
- The Starbucks app improves the experience by eliminating pain points like waiting in line to pay and pick up orders.
- Allowing extensive drink customization taps into the "IKEA effect" of people valuing products they co-create.
- Starbucks leverages various psychological principles, whether intentionally or not, to foster customer loyalty and a premium brand experience.
- Other businesses can apply similar behavioral science strategies to create engaging customer experiences.
- Pricing and branding products/services as "premium" can influence perceived value and quality.
- Leveraging loss aversion and FOMO through scarcity and limited offerings can drive consumer behavior.
Top Episodes Quotes
- “Congratulations. You're stupid in three languages.“ by Danny
- “Starbucks spends lots of time and money creating limited edition drinks like the unicorn frappuccino, or drinks you can only get at certain times of the year, like pumpkin spice latte.“ by Jennifer Kleinhens
- “It removes two of the biggest pains from getting coffee, waiting to pay and waiting to get your order.“ by Jennifer Kleinhens
- “You can get a half calf, extra ice, no whip, whatever you want, and they will gladly make it for you.“ by Jennifer Kleinhens
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Episode Information
Choice Hacking
Jennifer L. Clinehens
3/28/24
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