Psychology of Buying Part 1-IKEA

The following transcription was from the Bulletproof Youtube channel. Here is the https://www.youtube.com/watch?v=HMYTM5SXb2k

Peter Boulden
0:00:00
♪ This time baby I'll be playing through ♪ ♪ This time baby ♪ Today I'm gonna be doing something

Peter Boulden
0:00:08
that I thought was pretty interesting.

Peter Boulden
0:00:09
I am a big fan of Twitter. I get a lot of my news from there, I get a lot of ideas from there, I get a lot of education from there. And sometimes I think it's cool to kind of extrapolate those things into dentistry. So my name is Dr. Peter Bolden. I am part of a co-host with Dr. Craig Spodek for the Bulletproof Dental Practice Podcast. If you don't know of us, and you're watching this maybe on YouTube, together he and I educate and mentor dentists through the pathway of becoming kind of a Bulletproof through owning our own practices and sharing our experiences and things throughout the process. So anyway, I'm gonna jump into this because I think it's pretty fascinating. And this is going to be kind of some short little case studies, if you will, on the psychology of how people spend money and how big companies like Ikea, which is going to be the first one, Starbucks, things like that, how they use psychological tricks and tactics to help people to spend. So with that, though, obviously this is just going to become a business education, just kind of learning things. But I think there's also value in learning this from extrapolation, like I said, into dentistry. And there's not going to be a direct analog, I should do this because Ikea does this, but you can start thinking about how things would apply in your practice potentially. All right, so this is a guy I follow. His name is Trung Phan. I guess that's how you pronounce his last name. If I'm wrong, I apologize. This thread was actually written back in 2021. And the interesting thing here is he's basically said on the writing threads on how the world's largest companies, Apple, Starbucks, Ikea, use psychological hacks to get people to spend money. So I'm gonna dig into the first one because it's gonna talk about Ikea, which at first I was like, I don't know if I'm gonna do the Ikea one, but it was pretty good. So we're gonna jump into this thread. So Ikea, as most of you know, is famous for the world's largest furniture brand. Sales are 50 billion, it's the king of buy stuff you never planned to buy. And there's some quirks and kinks about why Ikea is the way it is, but there's a method to the madness, there's a reason that it's like this. So I'm gonna start going through some of the things. And then as I see something that's applicable for dentistry or just something that we should maybe learn or expound on, I will kind of put a pause in that. So the first thing he looks at when he talks about this is he says that business model is self-furniture that requires self-assembly. And you may think to yourself, like that doesn't make a lot of sense. Why would someone want to do that? But what they found is that a Harvard study found that people assign a higher value to furniture that they assembled their self or good that they assembled their self. And the name of this has become the Ikea effect, right? The Ikea effect is if I make it, I love it more. Obviously, that doesn't apply to dentistry, but I think it's pretty interesting, right? Because people grumble, you hear people grumbling about the size of the box of IKEA, trip home, and really we're assigning psychological value to that because once we got it home and once we assembled it, it's this accomplishment. All right, number two, the locations. So any of you who have Ikea in your town, you also know that getting there requires massive amounts of effort going through traffic. It is not in the most convenient places because A, the size of the store really has to be outside of the kind of metro areas. So once a shopper arrives after a long trek, they're gonna be motivated to buy something so as to not to waste the trip. And I think that's interesting. And again, I'm not sure this one applies to dentistry because obviously dentistry is a service-based industry, it's based on convenience and you want to put things as close to people. Because you don't think of like, oh, I had to drive so far to the dentist, therefore I'm gonna get more dentistry done. I don't think that applies. I think the actually the converse applies, you want to be more convenient because that reduces the friction as we've talked about before, reduces the friction for getting people to become on a recurring basis, right? And dentistry I think is kind of a subscription thing, meaning that like a lot of our goodwill is based on the fact that we know people will be coming every six months, every three months, every year, whatever it may be. So I see why they've established their massive mega centers here if you're looking on YouTube. Massive centers far away from town because people look at it as this destination, this journey, and once I've arrived, I'm gonna spend some money. All right, the next thing is the store flow. So the effort, the effort that Ikea wants you to keep consuming as you're spending your own money is interesting and you walk through the showroom and anyone of us who have been to Ikea, it's literally a maze. You're going through things and you're actually, it's an arduous journey. You're going through things all the way to the end in order to pick up your goods or your boxes. It's not even your goods, it's your unassembled furniture. And again, this is something that you feel a reward for because you've done this journey through the labyrinth.

Peter Boulden
0:05:13
Interesting.

Peter Boulden
0:05:15
The next kind of is correlated to this pretty well is that you see that Ikea is like a maze and it's a popular theme. You see that, sorry, popular meme. You see it on the internet, but it's true that you almost get lost in an Ikea. And there's really not that many exits and shortcuts. There's a couple if you kind of look at it, but basically they put arrows on the floor to make sure that you're following through the maze in which they intended you to do so. And again, this effort increases the perception. If you see here, the effort of solving the maze, going through this journey, it solves, increases the perception of value. Fascinating to me, this is fascinating. All right, I talked of it, number five is the guided arrow. So this maze-like design is complemented by the floor arrows. So essentially, you're basically telling the consumer what you want them to do. And you're handing over, you as the consumer, you're handing over your decision-making process over to IKEA. So what they're saying by this is this psychologically disarms and primes you for a later purchase. This was going to be a hard turn into dentistry, but I think the same thing applies when we talk about analysis as paralysis. I think the same thing applies when you're kind of looking at treatment plannings, treatment plan presentation. And we're not putting arrows and saying, just do this, because that doesn't psychologically arm someone or disarm someone. It makes them think like, well, that's the only choice I got. But what you don't want to do is create a bunch of metaphorical arrows in your treatment planning and say, well, you could do this and this and this. Maybe it's a bifurcated thing where it's like this way you could go, it's going to have this consequence. This way you're going to go, it's going to have this benefit and consequence. That's my best extrapolation. But that's what I was thinking about when I saw the arrows, because, you know, quote unquote, people don't want to be told what to do, but they really do. Meaning it's disarming to know that they are following the arrow, following the path in which they were designed to do so. And the same thing can be had when you go into a dental office, meaning that they know that you are the expert in what they should have. You live and breathe dentistry. You've gone to all these years of schooling. So it's disarming to them to say, like, okay, just kind of tell me what I should do. Tell me what I would do if I was your mother, if I was your sister, if I was your brother, whatever it may be. Okay, keep moving forward. Number six, a desensitizing environment. So what it's saying here is like casinos, which have no windows and there's word on the street that they pump in oxygen to make you feel better and they serve you free drinks. IKEA is kind of the same way. There's no windows in there, so you kind of lose track of all sense and space and time, and you stay focused on the idea of going through your maze, getting that acknowledgement and that dopamine hit of finishing the maze in order to buy your product later.

Peter Boulden
0:08:19
Also, they put, number seven,

Peter Boulden
0:08:21
is they have a licensed impulse buy. They're placing small items everywhere. Next to the big ticket items, there's some plates, a lot of stuff that you just don't need, but you're thinking, oh, this is pretty cool. At least I can buy it now on my journey. So I'm not sure how many of you have products that you sell in your office, but it might be good to have displays, even from a decoration standpoint, kind of throughout your office so that people either are waiting in the reception area or they're waiting in the back to be checked out or whatever it may be, there's areas where they can say, huh, I can do that. Maybe it's in every operatory, right? Maybe you sell certain high-end toothpaste or something like that. That's a good place to have it.

Peter Boulden
0:09:02
I'm going to continue on.

Peter Boulden
0:09:03
So number eight he has down is writing down a list. So if you've been to Ikea, you know that you get a pen, you get a pencil, a golf pencil, and you start on your journey. And you put your backpack on and you start through the maze. And so here's what I think is so interesting. And I talk about this all the time in goal setting. So they give you, could they put this in an app, make it really easy for you? 100%, right? It's a $50 billion company. But they're using the psychological tactic of getting you to write it down. So it's, and the act of writing it down creates accountability to yourself, especially in your own handwriting. That's why I always talk about it in terms of like your goal setting and things like that, is that it creates accountability when you see it in your own hand, versus like you type it out on a monitor or you're using an app, it's easy to say like, oh, that's just regular text. Like that doesn't resonate with me because it's not my own handwriting. You can recognize your own handwriting and it creates this accountability. So when your goal setting, you want to create this follow through. It's kind of the same, one of the same reasons I think when there's some school of thought to having people fill out their own appointment reminder cards that come in the mail. I mean, I know that's, we've gotten away from that in this technological error, but that was the thesis of why that was done, is that you see this come in the mail and you will recognize your own handwriting as a appointment reminder, which then creates this accountability that, oh yeah, I remember being there, I remember writing this down, I remember saying I would do it, versus now we have the appointment error where everything is text through or there's reminders on emails and things like that. But I think that was original idea, the psychological tactic of reporting reminders and getting people to fill out their own reminders. Number nine is their in-store dining. And the founder, I guess they are, I think they're a Norwegian company or Swedish company, but I won't flutter the founder's name, but he basically says, you can't do business on an empty stomach. You know, so basically if someone is full and satiated and comfortable there and they know they can get a meal, that they are going to stay longer. They're gonna stay longer, they're gonna talk about their potential purchases, and therefore that usually yields a bigger purchase size. As a side note, it's crazy, I've read this statistic. IKEA sells one billion meatballs a year, what? All right, and the last one, the last one, I think this is the last one, is that there is great value. So IKEA has this democratic design approach, right? It takes, it has this, their engineers are fascinating, is they take the product and they make sure that it's kind of designed to fit in the box, right? Like how many of us have left IKEA with all this stuff flat packed where it can actually fit on top of a Mini Cooper potentially and the other tactic with that is that it creates this, again, we talked about it in one of the first psychological tactics, is that it creates value because you're going home and jumping into actually making your stuff, right, which assigns value to it. But for their standpoint, right, the self-assembly reduces cost and the price of their manufacturing. So everybody is winning from that tactic of let's flat pack everything. I don't know why I'm stumbling over my words today. All right, so number 11 is, I was wrong, there's more than 10. Number 11 is something that I think would apply to dentistry as a small little tactic in our offices. So they have mirrors everywhere. Mirrors, mirrors, cheap mirrors, lit mirrors as you can see from this picture. So it's no secret why this thread says it's like we're all narcissists and we can't keep our eyes off the reflections of ourselves. So IKEA brings out all these positive emotions by placing mirrors literally everywhere so that people can see something that they like, which is them. I think that applies to dentistry too, right? Lots of mirrors would be a good thing in there, whether it's a checkout mirror, whether it's a goodbye mirror, you know, when someone's leaving after they've had impressions or things like that. But mirrors are awesome for that tactic and they reflect a lot of natural light. So mirrors may be something. If you're lacking design in your office, maybe putting up something as simple as mirrors could psychologically increase the well-being, the positive emotion that patients feel in your office. Who knows? It's an easy thing to test, that's for sure. All right, and then finally, the power of smell. I think this does apply to dentistry. Maybe not so much as their example of their famous cinnamon buns that they sell for a dollar that they place at checkout, but smell is an extremely powerful memory recall for people. So much so, like many of you know Chris Tuff, who's a good friend of mine, he actually buys, he's into the science of memory recollection by smell. And it's pretty strong, he's a big fan of this. So he has candles designed to kind of remember certain instances in his life. So that being said, there may be, maybe your practice could have, if it's not its own custom fragrance, maybe it's something that is unique enough that you know, like these are our ABC Dental scented towels, right? And so maybe it's at the end, maybe it's a hot scented towel at the end of the procedure that signifies the value that they went through, the journey that they went through. I think that's why airplanes give hot towels. I think that's why things are scented. But especially in dentistry, there's a stigma associated with eugenol in dentistry. And people have this visceral response, people who grew up in dentistry and had bad associations in dentistry, had this visceral response to the smell of eugenol because they remembered the pain that they had in old school dentistry potentially, or pain they had in their childhood. Now we don't use that as much, but people still talk to me in my everyday life about, oh, the smell of the dental office, because they're remembering it from their childhood. So the memory recall of smell is super powerful. So you want to combat that with having your office smell the anti-eugenol, right? Something that smells more like a spa or something that is pleasant, right? Whether it's lavender, eucalyptus, things like that. Maybe there's your own signature scent, I don't know. But the point is, is that it's a powerful recall, especially if they've had a good appointment, one that they felt like they accomplished a lot, a lot of quadrant dentistry, or maybe a cosmetic procedure. At the end, memory recollection can be something associated with your practice on that. So I think that is an extrapolation of something into dentistry. And that's it. So I'm gonna keep going into the secrets of some of these, keep breaking down the companies, mainly because I think it's truly fascinating. If nothing else, if there's no segue into dentistry, we're all learning some things, but I think eventually, eventually we're gonna keep picking apart things that may augment or help our experience in our practice, and at the end of the day, I think that's the great differentiation in dentistry, is the experience you give someone, right? The value creating your practice of them being a patient, that is the great differentiation, in my opinion. So, we'll see everyone next time. Take it easy.

Peter Boulden
0:16:48
♪ This time baby I'll be free ♪ ♪ This time baby I'll be free ♪ crazy.

Transcribed with Cockatoo