Recent research suggests that reminiscing about the past can make us to spend more on products. Nostalgia weakens our desire to hold onto our money, instead fostering social connectedness.
Lasaleta, Sedikides & Vohs (2014) Nostalgia weakens the desire for money. Journal of Consumer Research.
In a recent experiment on this “dreamy” effect (Lasaleta, Sedikides & Vohs, 2014), participants were either asked to view print ad copies that featured nostalgic experiences from the past, or neutral ones that focused on making new memories. The willingness to pay for products was then tested by showing participants a booklet of product options, and measuring their willingness to pay for each one. It was found that participants who viewed the nostalgia-induced ad copy were likely to pay more for the products!
But why exactly does nostalgia make us spend more? The authors of the study suggest that there’s a link between nostalgia, social connectedness, and our desire for money. Nostalgia is the recollection of a fond memory, influencing individuals to look back at memories through a rose-tinted sense of positivity (Hepper et al., 2012). It may seem unsurprising therefore, that nostalgia fosters social connectedness (Juhl et al. 2010), reduces loneliness (Zhou et al. 2008), and increases prosocial behaviour (Stephan et al. 2014). Money, on the other hand, tends to reduce the need for social connectedness and actually promoting isolation (Vohs et al., 2006). The latter part of the great film There Will Be Blood (2007) comes to mind here…
And in the context of nostalgia, social connectedness and money are said to be interchangeable (Lasaleta, Sedikides & Vohs, 2014). What this means is that when people have had their fair share of one, their need for the other lessens. For instance, people living in a country with strong social support (like our friends in Scandinavia) tend to rate financial skills and business success as being less important to them (Vohs et al., 2014).
These findings, based on the principle that people who feel they have achieved one goal are then likely to spend time, resources and effort into pursuing another (Carver and Scheier 2004), means that when a person feels socially connected to others, their desire to hold on to their money will weaken.
Key takeaways for decision makers
While nostalgia has been commonly used by companies such as PepsiCo and General Mills to advertise in the past, digging deeper into its effects gives us an idea of the underlying mechanisms that shape our willingness to spend more on products whose ads capitalize on it.
Using nostalgia for good nudges
That nostalgia causes a reduction in one’s desire for money means that it can be used to promote prosocial behaviour, such as donating to a charity, promoting participation to a charitable event and even hiring volunteers for a cause. Social marketers should make use of this effect by alluding to nostalgia in campaign messaging. They would do well to understand what nostalgia means for their target audience.
Creating social depth
This effect has implications for “social” products and services like social networking sites and apps (such as Tinder). Creating products around the theme of nostalgia can foster social connectedness, therefore fitting in well with a product’s goal of building and maintaining long-term social relationships. Timehop is a great example, as well as the popular #throwback concepts (such as #throwbackthursday or #tbt) being used on Instagram, Twitter, Facebook and other social platforms. As our use of digital social media grows, and we develop an ever-growing history of archived experiences within it, the opportunity to capitalise upon the nostalgia effect becomes bigger with time…
The power of our political past
In their paper on the nostalgia effect, Lasaleta, Sedikides & Vohs (2014) highlight its strong implications for political campaigning and donations. A Gallup poll found that for generation X and baby boomer respondents alike, the ideal president was one from their teenage years, suggesting that nostalgia has a powerful and long-lasting effect on our decisions (Saad, 2008).