𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐜𝐮𝐬𝐭𝐨𝐦𝐞𝐫’𝐬 𝐦𝐞𝐦𝐨𝐫𝐲

How do we switch between brands? How did you, a Dunkin Donuts fan, switch to Starbucks? This is a question Dan Ariely asks in his bestseller Predictably Irrational. I build on it here.

You didn’t choose Starbucks over Dunkin because Starbucks is better, even though you may say so. You did it because you were more certain Starbucks is good. This is an idea from the late Joel Raphaelson, the celebrated ad man from Ogilvy & Mather.

Deciding which is better can be a complex calculation. There’s the price, product quality, ease of access, and what the experience made you feel.

💡So we replace the question ‘Is this better?’ with ‘How certain am I that this is going to be good?’

And we make up a story that answers the question consistent with our past decisions. ‘I had Starbucks the last time and it was good!’ The vividness of the memory adds disproportionate weight to our decision. We trust our past self. We line up behind it to make a future choice (self-herding)

Starbucks it is. But what did Starbucks do to win you over from Dunkin in the first place?

By reframing what it offered. It didn’t just pit coffee against coffee; it introduced dimensions for which there may have been no anchor present. New coffee sizes, new choice of drinks, expensive chairs, fancier coffee machines, inviting decor, and the fellowship of other coffee lovers.

Once Starbucks was able to do that, it framed an otherwise ambiguous experience (‘Sip for sip, I’m not sure if Starbucks is better than Dunkin’) in a way that made total sense to you.

Now even when you order coffee in or take coffee to go, you pick Starbucks. Even when what you loved about Starbucks is absent (vibe, decor, service). Anchors can be sticky.

Businesses sweat over new customers because their future choices are affected by initial anchors. For any competitor, there’s a reference point, an anchor, to dislodge now.

A low initial anchor, for your great product/service, can make customers trade your product for another’s. A high initial anchor, for something average, can do the opposite. The memory of the anchor decides customer behavior. Moving an anchor already made is hard because it is changing someone’s memory.

We don’t always make the best trades for ourselves. We don’t know how to measure our pleasure. We rely on stories, memories, and anchors. That’s why, in a free market, businesses are always working out how to provide experiences that can make sticky anchors come loose. That is how brands win trust.