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Behavioral Science For Brands: Leveraging behavioral science in brand marketing.
Costco: Loyalty Cards, Ski Trips, and the Sunk Cost Effect
Mar 12, 2024
The podcast discusses Costco's effective use of loyalty cards and the sunk cost effect in driving consumer behavior. It explores how Costco enhances user engagement through the illusion of progress and delves into the psychology of reciprocity in brand strategies.
21:54
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Quick takeaways
- Costco leverages sunk cost effect through membership fees to influence consumer loyalty.
- Reciprocity principle utilized with free samples at Costco increases customer engagement and sales.
Deep dives
Costco's Business Model and Success
Costco, founded in 1983 by James Senegal and Jeffrey Brotman, adopted a unique business model different from traditional grocery stores. With a focus on offering large stocks at fair prices, Costco gained success by providing a no-frills shopping experience with the best prices. This approach propelled Costco to become one of the world's largest retailers with over 100 million members and impressive sales figures.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode