By: Shea Posey, Senior Account Executive, and Jake McKenzie, Chief Executive Officer
What effect does the economy have on us psychologically?
We’ve often heard the phrase “pain at the pump.” Monetary loss has long been associated with pain, albeit metaphorically. Well, it turns out that the sinking feeling that comes about as we watch our 401Ks continually decline isn’t because we’re being overly dramatic.
A recently-conducted meta-analysis that explored the overlapping brain regions between monetary loss and pain concluded that losing money can in fact cause, not just social pain, but physical pain as well. When researchers looked at the areas of the brain where subjects suffered monetary loss, the physical part of the brain associated with pain lit up. The emotional areas of the brain, which house societal pain – the pain we feel when we lose something or someone close to us – were also firing.
Although the neural representation of monetary loss is more similar to social pain than to physical pain, previous studies have concluded that chronic money stress produces physical pain, reduces tolerance to pain, and often leads to lower back pain, neck pain, and shoulder pain. Financial challenges can also attack a person’s self-worth and lead to depression. All of these physical problems can compound and eventually turn into heart attacks, hypertension, and an impaired immune system.
What this tells us is that the psychological impact on consumers in a bad economy is a highly emotional phenomenon. As discussed in The Scarcity Mindset, this phenomenon affects everyone and causes actual psychological changes, like having less impulse control and temporarily lowering our I.Q. It even causes us to take non-rational actions such as hoarding resources.
These all have major implications on how we market to consumers during this period. If you haven’t already been doing so, given all the turmoil over the last 2+ years and how it has affected consumer behavior, it’s more important now than ever to change your focus to more emotional marketing and less rational. To discuss how we can help you better reach consumers during an uncertain economy by applying psychological insights to your marketing efforts, give us a call at 833-579-1905 or email us at firstname.lastname@example.org. And for a deeper dive into how much consumers have changed over the last two years and what marketers can do to adapt to those changes, check out our Psychology Behind the New Normal webinar!