Lessons from the leaders: How to aggravate customer pain for commercial gain

Pain
istock
Sampson Lee
Founder
Global CEM
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Last month, MyCustomer examined how brands such as IKEA and TK Maxx are thriving, despite delivering painful customer experiences. In this article, Sampson Lee elaborates upon this analysis through his concept of Blue Oceans and Red Oceans, exploring how he believes competitive advantage can be created by identifying 'good pain' and 'branded pleasure'. 

Blue Ocean is about using value innovation to reach new and untapped market. It sounds exciting, especially in today’s highly competitive environment and many companies are trying to pursue their Blue Ocean.

However, not many are successful in creating Blue Ocean. Even for those who successful create their own Blue Oceans, they soon turn red. Companies usually cannot sustain what they create.

Why? The most common and observable explanation is: innovations are copied. The uncommon and hidden truth is something you may have never thought of: companies improve pain.

Build up your competitive advantage by identifying good pain and branded pleasure

Pleasure pain

In the above diagram, you create your Blue Ocean by generating a significant pleasure peak for customers.

In this stage, particularly for the start-ups, you focus your energies and limited resources on what makes you succeed and stand out – your competitive advantage, and you disregard imperfections and defects you might generate.

In other words, you build up your competitive advantage by identifying your Good Pain and Branded Pleasure.

The “pain has to be improved” phenomenon

After creating their Blue Oceans, most companies move towards “Destructive Improvement.” When they go in this direction, their Blue Oceans are destroyed by the “pain has to be improved” phenomenon. This phenomenon is driven by the sacred belief of Continuous Improvement and Customer Centricity.

Continuous Improvement is the philosophy behind Kaizen, which preaches relentless continuous improvement, and the key systems dedicated to pursuing excellence, such as Six Sigma and Total Quality Management (TQM). Imperfections, pain and defects are the ‘devil’ and must be eliminated. Pain has to be improved.

Customer-centricity dominates in our modern commercial world. Customers’ voices ought to be heard, customers’ complaints must be addressed, and making customers suffer is an unforgivable sin. Pain has to be improved.

If you were the founder of a start-up who just opened a new Blue Ocean, or if you were a senior executive who successfully created a new distinctive competitive advantage in your industry, you would want to move forward, to build a stronger and bigger company. You might buy business books, attend conferences, or employ consulting companies. I’m sure two messages would come across from these field gurus, academics, technology vendors and management consultants. Always focus on continuous improvement and customer-centricity. Pain has to be improved.

Destroy your Blue Ocean by improving pain – destructive improvement

On one hand, you are being brainwashed by the “pain has to be improved” phenomenon, while on the other hand, no surprise here; your big innovation is attracting imitators.

Very few Blue Oceans are immune to copying; it is usually just a matter of time and effort. Internet and new technologies have sped up this process and made it easier. When your rivals imitate your offering, it lowers the pleasure peak perceived by customers. 

Pleasure pain gap

 

The opportunity cost of improving pain is missing the golden time-window to further enhancing your Branded Pleasures by diluting your limited resource.

Using your resources more effectively than your competitors is a key to business success. Spend even a tiny amount improving something that does not give you the desired result and you are taking a step away from achieving a higher pleasure peak and a step closer to weakening your competitive advantage.

Even if you improve those things that are either important or painful to your customers, if they are not linked to your Branded Pleasures, it is destructive because it would eat up the resources of your Branded Pleasures, further lower the pleasure peaks for customers, make it look more like its competitors and be easier to copy. You waste your first-mover advantage.

Continuous improvement turns into destructive improvement. The Blue Ocean becomes a Red Ocean.

Suffer the most to enjoy the best sushi in the world

Sukiyabashi Jiro, a sushi restaurant located in Ginza, Tokyo has earned three Michelin stars for years (note 1). His restaurant is remote and difficult to find; it is in a basement, in a far-off district.

The seating area is tiny; it can hold a maximum of ten customers at a time. Jiro doesn’t accept walk-in customers and reservations have to be made more than a month in advance. The prices are steep; each customer pays more than 30,000 yen. His menu is fixed and with only a limited number of choices.

This sushi restaurant pushes pains to the extreme: tiny space, long wait for reservations, expensive, and almost no choice. But Jiro does make great sushi. He never diverges from this mission. Jiro focuses all his resources, attention and energies to make sushi. He does not expend resources improving anything we see as a pain. By aggravating those pains, the sushi restaurant is creating the highest possible pleasure peak for their customers.

Yet Jiro has the highest Michelin ranking and his restaurant is always full. The place is so famous that former US President Barack Obama asked to dine there during his visit to Japan in 2014 (note 2).

Sustain your Blue Ocean by aggravating pain – creative aggravation

In sports, and really in any competition, we recall the champions, the ones who win the gold medals. It is the same in customers’ minds in business competition. To be the winner, you have to generate highest pleasure to customers.

Pleasure pain gap

 

To generate the highest possible pleasure peaks, you have to move towards creative aggravation. Not only not improve pain, you aggravate pain; imagine the tremendous resource that you could save by reallocating resource from Good Pains to Branded Pleasures. You generate the most severe pain peaks – as far as they are not falling into the unacceptable levels of your customers – so you can heighten your pleasure peaks to unprecedented levels. You make your company extremely difficult to imitate. You capitalise fully your first-mover advantage. You put your limited resources to their best use.

Creative Aggravation sustains your Blue Ocean, reinforces your competitive advantage and transforms it into a sustainable strength by aggravating pain.  

Great brands have a large Pleasure-Pain Gap 

Great brands have two things in common: they generate an unprecedented level of pleasure to their customers to beat their rivals and eliminate imitators; they have a large Pleasure-Pain Gap (PPG) to maximise their resource productivity.

  • Based on empirical data collected globally from 8,500 customers (note 3), Starbucks, IKEA and Louis Vuitton each has a large Pleasure Pain Gap (PPG).
  • Based on 4,500 valid survey responses (note 4), China Merchants Bank (CMB) outperformed all 15 credit card issuing banks on all metrics, yet had the largest PPG among all major rivals.
  • Based on the feedbacks of 757 IT managers (note 5), IBM has the most favourable B2B purchase experience as well as the largest PPG among 14 IT solution vendors.
  • IKEA aggravates pain with DIY services to generate unmatched pleasure on good value for the money.
  • Starbucks aggravates pain with premium pricing to create extraordinary pleasure with their “new coffee experience” and the Third Place.
  • Louis Vuitton aggravates pain with the different service levels to deliver unprecedented pleasure with exclusivity.
  • Southwest Airlines aggravated pain with no meals, entertainment, upgrades or reserved seats to offer knockout pleasure with cheap airfares.
  • Jiro’s sushi restaurant aggravates pain on most aspects of the dining experience to render the utmost pleasure with the best sushi in the world.

All these industry leaders understand Creative Aggravation. They create the highest pleasure peaks to their customers by enlarging the Pleasure-Pain Gap.

Make a paradigm shift from “Improve Pain” to “Aggravate Pain

The secret to eliminating imitators and preventing your Blue Ocean from turning into red is to make a paradigm shift from "Improve Pain" to "Aggravate Pain."

Strategy is about resource allocation. The effectiveness of a strategy is judged largely by the effectiveness in resource allocation. "Aggravate Pain" is undoubtedly a far more superior strategy because it uses resource more effectively than "Improve Pain." There is no more better way to transform your competitive advantages into sustainable strengths without deploying extra resources: "Increase your PPG."   

Pleasure pain

Visually, when you narrow your Pleasure-Pain Gap (PPG), you destroy your Blue Ocean. When you increase your PPG, you sustain your Blue Ocean. The height of a building is in proportion to the depth of its foundation. It is common sense, isn’t it? 

Not many companies are successful in creating Blue Ocean, as it takes a unique combination of innovative thinking, wisdom and courage to invest resources differently.

However, making a paradigm shift from “Improve Pain” to “Aggravate Pain,” may require even more innovative thinking, wisdom and courage than creating your Blue Ocean in the first place. Only the most outstanding people understand this and are able to put it into practice.

NOTES

  1. See Oldest Michelin Three Star Chef – Guinness World Records, retrieved 27 April 2014, from http://www.guinnessworldrecords.com/world-records/oldest-Michelin-three-....
  2. See David Jackson, Obama: 'That's some good sushi right there.' (USA Today, 23 April 2014).
  3. Global Starbucks In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), September-October 2007; Global IKEA In-store Customer Experience Research, Global CEM, CustomerThink (U.S.) and TOTE-M (Netherlands), December 2008-February 2009; Global Louis Vuitton In-store Customer Experience Research, Global CEM and CustomerThink (U.S.), October 2008.
  4. Mainland China Credit Card Customer Experience Research, Global CEM, May-June 2008 and May-July 2009.
  5. Mainland China B2B Purchase Experience (IT Solution) Research, Global CEM and CustomerCentric Selling (U.S.), July-August 2007.

 

About Sampson Lee

About Sampson Lee

We’ll run our 58th, 59th and 60th CX certification in Amsterdam on Oct 25-26, Hong Kong on Nov 20-21 and Atlanta on Jan 22-23. Visit GlobalCEM.org to know more. I invented the PIG Strategy, founded Global CEM, and run the World's 1st CX certification training program in 19 international cities across five continents: Amsterdam, Barcelona, Brussels, Copenhagen, Frankfurt, Milan, London, Paris, Istanbul, Dubai, Johannesburg, Shanghai, Bangkok, Hong Kong, Singapore, Sydney, Los Angeles, San Francisco and Toronto. My new book PIG Strategy: Make Customer Centricity Obsolete and Start a Resource Revolution is exclusively available at GlobalCEM.org.

Replies

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13th Oct 2017 11:07

For any reader of this article who feels uncomfortable to take the terms "pain" and "pain point", which isn't unusual, I would advice you to swap them with friction, effort, defect, valley, or imperfection - choose a substitute that you would accept to minimize the barriers for comprehending the genuine meaning and merits of enlarging the Pleasure-Pain Gap (PPG).

Thanks (2)
12th Oct 2017 12:13

As a pro-customer advocate I find this very uncomfortable reading.

I find it uncomfortable and would like to challenge it, not just because my business and many others are prospering from the opposite view, but because the underlying objective seems to be the cynical increase of profit, without any consideration of moral values.

Of course some aspects of customer experience cannot be improved economically. But if I've understood this correctly we are encouraged to embrace that tactic and exacerbate customer pain, which seems to me morally wrong and commercially very questionable.

The last line jars a little too. It seems the difficulty is my limited intellect:

"Only the most outstanding people understand this and are able to put it into practice."

Fair point, in my case. But didn't a tailor once use that line to sell new clothes to an emperor?

Thanks (3)
13th Oct 2017 11:11

If this article's title is changed from "How to aggravate customer pain for commercial gain" to "How to aggravate pain for creating the largest VALUES to customers', I believe it would make you and some readers feel less uncomfortable.

As a regular IKEA customer, performing DIY jobs is a pain point. Though I can understand why IKEA makes me ‘sweat’ – to channel the savings offering the best prices for their furniture and household items (IKEA’s brand purpose) – efforts are still undesirable; but it doesn’t stop me purchasing from IKEA, as far as the perceived VALUE (i.e. inexpensive prices) is larger than the endeavor (i.e. DIY services).

Likewise, being a loyal Starbucks customer, paying USD5 for a cup of coffee is a pain point. Despite I know why Starbucks has to charge premium prices – to create and maintain the Third Place (brand purpose of Starbucks) – high-priced coffee is nevertheless unwanted; but it wouldn’t prohibit me buying from Starbucks, to the extent that the perceived VALUE (i.e. the Third Place) exceeds the endeavor (i.e. premium prices).

On that ground, the DIY services of IKEA and premium prices of Starbucks are Good Pains and shouldn’t be eliminated, because they help generating substantial VALUES to customers – Branded Pleasures – which reflect the brand purposes of IKEA and Starbucks. The existence of Good Pains is to support Branded Pleasures. It is not about creating pains, it's creating VALUES to customers.

Don't get me wrong! The objective of enlarging the Pleasure-Pain Gap (PPG) is not for aggravating pains, it's generating unprecedented VALUES to customers.

Thanks (1)
avatar
By FButtle
13th Oct 2017 03:45

Interesting article, Sampson. It seems to me to be a different way of thinking about the idea of value. Value is what customers experience in the balance of costs and benefits. Your IKEA case, for example, shows that - for you at least - the costs (dragging yourself around room settings that have no interest to you, and assembling products at home) are more than offset by the benefits (cheap price). You experience value as a result. And don't get me started on Starbucks. If that's premium quality coffee, I'm the Wizard of Oz.

Thanks (1)
13th Oct 2017 12:53

Francis, thanks for your response. Indeed a brand experience could be felt differently by customers in different regions. Did Starbucks learn any lessons from their humiliating defeat in Australia nine years ago? For example, does Starbucks now realize that Australians are brand loyal to their local coffee shops because they know their barista and people aren't going to leave that to go to a global brand which charges 25% more? Would like to know more from an Aussie's perspective.

Thanks (0)