The world famous, Nobel prize winning, behavioral economist, Daniel Kahneman has spent years reviewing and leading the whole literature on happiness research. Overwhelmingly, it finds that if we really wanted to be happy, we wouldn’t be interested in premium brands at all. All the luxury brands in the world, only contribute to a brief boost in peoples’ happiness, after which, through a process of what is called “the hedonic treadmill” we get used to our new found bling, and quickly return to a relatively stable level of happiness.
In fact, not alone does looking successful by having all those premium brands not drive happiness, we don’t even need to be particularly successful to lead a happy life. Kahneman’s research, conducted with fellow academic, Angus Deacon, found that achieving a comfortable, middle class salary of $75,000 a year, ensures you have enough economic security to ensure everyday contentment, and that any additional salary earned had no significant effect on how happy you are.
In fact, the secret to happiness is simply spending lots of time with family and friends. So why are we spending all this time and energy trying to get ahead in life, earn more money, to buy expensive things that contribute only briefly, but always temporarily, to everyday happiness? Is advertising to blame? Are we as an industry selling a false dream, that money can buy happiness?
Kahneman’s recent realization is that while we think we want to be happy, what most people are working towards is a very different form of happiness. Happiness is about the “experiencing self,” a momentary experience that arises and is fleeting. What we’re really interested in is satisfaction, the “remembering self” a long-term feeling, built by achieving goals and the kind of life you admire.
As Kahneman remarked on a recent interview “Altogether, I don’t think people maximize happiness in that sense...this doesn’t seem to be what people want to do. They actually want to maximize this satisfaction with themselves and with their lives. And that leads incompletely different directions than the maximization of happiness.”
A life focused on satisfaction, is a life based mostly on comparisons with others, achieving goals, meeting expectations. So while money plays little role in increasing happiness, money has a really significant influence on life satisfaction, with wealthier people reporting significantly higher levels of life satisfaction.
And that’s where premium brands come in. The Gucci handbag, the Tesla, the Apple smart watch, all of them, I believe, contribute to a feeling that you are making it in the world, and remind you of your progress to those goals and expectations. It may not be the most noble feeling in the world, and it certainly won’t make you happy, but its one that is deeply important to human beings.
This understanding of premium brands and their role in contributing to feelings of human satisfaction, helps us understand how premium brands should act in the world. Premium brands are not built on niche appeals. They’re built by brands that engage in culture with a convincing point of view about what goals, values and expectations are worthy of pursuit. Take some recent successes and failures in the world of premium brands:
- Tesla has overtaken Mercedes as America’s most popular luxury sedan, by convincing people that a commitment to the environment and technology is a status symbol.
- Lululemon is rapidly gaining on Victoria Secret’s, because looking healthy and strong is the beauty American women now aspire too.
- Tito’s Vodka has replaced Smirnoff as America’s top selling vodka because the enthusiasm of an entrepreneur became more exciting than the endorsement of a Tsar.
In all six of these examples, premium brands have succeeded or failed based on their ability to follow and shape our shifting sense of what values, goals or expectations we increasingly hold. They succeed the degree to which they help us feel satisfied in our life’s journey.
Tesla, Lululemon, and Tito’s don’t make you happy, or if they do, only briefly. But they, and other successful premium brands, do communicate to their owners and their friends, the progress you are making towards a life well lived. That won’t make you happy, but it will leave you satisfied.