Painful Games Companies Play

Does your company play painful games with your customers? I’m not talking about physical pain, but brain pain. More specifically, what has been termed buying pain or the pain of paying. According to research conducted by George Loewenstein of CMU and others, this pain is triggered when we are presented with a product and price that seem like a bad deal. Now, if you sell luxury items, it’s quite possible that a pain response is part of every sale, but the buyers rationalize the premium price they are paying as the cost of buying the best. A recent business trip highlighted what I think are UNPRODUCTIVE invocations of buying pain.

We Try Harder… To Get Your Money

The first example occurred to me as I raced back to the airport in my rental car to catch my return flight. When I rented the car, I had chosen the option that said I would return the car full of gas when I brought it back. This meant that if I skipped the fill-up on the way to the airport, I’d be charged a ridiculous amount per gallon if Avis filled it up. The going rate seems to be over $7 per gallon, nearly three times the gas station price of about $2.50. (Fortunately, I spotted a station just before the airport and filled up, getting to my flight with time to spare.)

I analyzed what happened with my brief wrestle with the option of buying my own gas or paying through the nose for the car rental company to refill the tank, and wondered about the competing forces at work in my brain. On one hand, I hadn’t burned much gas on my short trip, and the cost of not stopping would have been under $20. That’s a sum I could afford, and it would likely be reimbursed by a third party anyway. What prevented me from zipping by the gas station and heading directly for the airport was that my brain was rebelling at the knowledge that someone would be paying three times the fair price (or what my brain judged was a fair price). Loewenstein’s fMRI studies showed pain centers being activated when prices were judged to be unfair, and I have no doubt that seven-dollar gas lit up mine. I’ve filled up rental cars even when I knew I had used so little gas the penalty would be minimal. Indeed, for me the price per gallon is the irritant, not the actual amount of the surcharge.

This practice is no doubt a nice profit booster for the rental companies – renters with a less entrepreneurial history than mine can probably separate the buying pain response occasioned by spending their employer’s money vs. their own. (For me, spending too much for something fires up my pain response, whether it’s coming out of my pocket or my client/employer’s.) No doubt many renters just let the extra $20 get buried in the overall rental bill and don’t think twice. But I’m sure there are plenty of customers who can’t bring themselves to pay extortionate gas prices and stop to fill up.

So why should the Avis, Hertz or any other rental company care if some frugal customers stop to fill their cars while many others acquiesce to the higher, hassle-free price? I think this approach affects the customer service experience in a negative way. For the frugal customers who refuse to pay the high price, it adds stress and uncertainty to the return process. It seems like the trip to the airport is always a tight schedule to begin with, and, if you don’t know the city and the route to the airport, you are never quite sure if and where you will find a convenient station. To add even more uncertainty and stress, one rental company I used recently displayed a sign that told customers they must fill up within 10 miles of the airport, and produce a receipt from the gas station. We’ve all seen aiports where the approach is a long highway devoid of conveniences like filling stations, and being given a specific, narrow target to hit makes the experience even worse.

I’m also sure that some of the renters who pony up the seven bucks per gallon DO feel a twinge of buying pain when they check in.

What Would Zappos Do?

Would a company truly trying to create a great rental experience subject their customers to the choice of being gouged for gas or having to try to hunt down a gas station while they rush to the airport to catch a flight home? Would Zappos, say, levy a triple surcharge on return shipping to cut down returns and boost their margins? No, and no.

Painful Game #2 – Baggage Fees

Now that most airlines (but not Southwest) are charging ever-higher amounts for baggage, as much as $25 for the first bag, just about every traveler seems to be packing as big a carry-on as the airline will allow. On the regional jets that seem to dominate air travel these days, these so-called carry-on suitcases are never actually put in the airplane’s cabin – rather, they are gate checked during the boarding process and retrieved in the jetway (or on the tarmac) upon arrival. On bigger jets, the overhead bins become stuffed quickly on full flights leading to delays in getting the passengers sorted out and seated.

In the past, even if I packed a carry-on, I often checked it on the flight home because the consequences of a delayed bag were minimal at that point. Not having to drag the bag into restaurants, etc., was a plus. My frugal brain rebels, though, at paying $25 for the modest convenience of a lighter load in connecting airports. So, I don’t check the carry-on.

Where the pain kicks in is realizing that the airline has saved no expense by making me carry my bag, wait on the freezing tarmac, etc. The plane’s fuel consumption will be the same. The labor savings are likely non-existent, particularly when gate-checking is involved. My brain interprets the bag fee not as a reasonable charge for extra service provided, but rather a means of transferring money from my wallet to the airline’s bottom line. Bad value = pain.

Yes, I could afford the $20 or $25 to check the bag on the way home. But my brain objects to the “markup” on the checked bag service, and I don’t. Instead, I grumble as I drag the bag everywhere I go in the airport and as I join the scrum of other passengers on the jetway trying to retrieve their own so-called carry-ons at the end of each flight.

How To Be Loved

Most companies would like to be loved by their customers, as is the aforementioned Zappos. If a company wants to be loved, it should look at every aspect of its service that causes its customers pain, whether it’s buying pain, stress, uncertainty, or anything else, and try to eliminate that. One example: the most succesful online marketers have boosted their sales by doing things like eliminating shipping (or shipping upgrade) charges, making returns easy and painless (even though returns are horribly costly and often involve dealing with damaged or shopworn products), and similar steps. Yes, these measures make each order a little less profitable. But, by putting short-term profit maximization concerns aside, these successful companies minimized their customer pain and ended up prospering in the long run.

Travel industry companies would do well to look at changing their philosophy – at the moment, they seem to be in a death spiral of reduced service, higher fees, and an increasingly unpleasant overall customer experience. Southwest Airlines has bucked this trend somewhat, and has been the most successful domestic airline. There should be a lesson there, but is anyone paying attention?

What Causes YOUR Brain Pain?

It’s Neuromarketing reader participation time – what fires up the pain center in YOUR brain when you are buying a product or service?

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This post was written by:

— who has written 957 posts on Neuromarketing.

Roger Dooley writes and speaks about marketing, and in particular the use of neuroscience and behavioral research to make advertising, marketing, and products better. He is the primary author at Neuromarketing, and founder of Dooley Direct LLC, a marketing consultancy. Follow him on Twitter.

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7 responses to "Painful Games Companies Play" — Your Turn

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Liz Lynch 11. February 2010 at 11:46 am

I also recently rented a car from a place that required fill-up within 10 miles and a receipt. We were on vacation and wound it up feeling a little desperate as we hoped to run into a gas station at the right point on the road to Houston. Oh yes, and it was 5:30 a.m., we were running late and we had two cranky 3 year-olds in the back seat. Guess who we’re not renting from next time? I don’t care that there were actually several convenient gas stations with reasonable prices close to the airport; we didn’t know the area, and it created exactly the stress you describe.

One recently painful experience had more to do with customer service. I’ve done a lot of work on customer experience including coordinating across channels, so my guess is this isn’t the way Land of Nod intended this to go. They sent a free shipping offer just before Christmas which I took advantage of on the last day, buying a very cool set of blocks for one of my daughters. I had trouble getting the promotion code to work, but in the end decided it was going through correctly. My confirmation email showed a shipping charge, so I called. The phone rep told me that the promo ended at midnight eastern time and as I’d ordered at around 10 pm from my home in California I had missed the offer. Now I was ticked off both at Land of Nod for charging me shipping and at myself for not reading the fine print. When I said it just wasn’t worth the shipping for a $35 toy, the rep let me cancel my order instead of using some judgment and taking off shipping. I’m still ticked off at Land of Nod. Rational? Probably not, but I’ve been a consistent customer and they were willing to let something like $8 get in the way of that relationship. To make it worse, when I checked the fine print after I got off the phone, the offer had actually ended at midnight central time. I’d missed it by 7 minutes. Come on! And now I don’t get that same “oh, I love Land of Nod” feeling when their emails show up.

Liz

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Roger Dooley
Twitter: rogerdooley
11. February 2010 at 3:13 pm

“5:30 a.m., we were running late and we had two cranky 3 year-olds in the back seat” – details may vary, but this is the kind of thing that turns a minor annoyance into a major source of stress and leaves one with a bad feeling about the brand.

Roger

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Alexandre Bigaiski
Twitter: alexbigaiski
11. February 2010 at 12:51 pm

My brain pain comes to me when I buy a product or service that not reach my expectative. That products that doesn’t are what I though it were.

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Denise 11. February 2010 at 3:05 pm

Banks are just as bad as airlines, even though $$ amounts are less!!!!! They have a fee for everything …. and it’s my money they are using and they charging me a fee to access, get my bank info., etc.

To boot, there CS policies are completely insane and will push my buttons BIG time!! I had a situation where one of my checks was overlaid by someone else’s check when their readers were scanning the checks. They pulled $1000 out of my account because their scanners made a mistake in reading the wrong account #’s with wrong $$ amounts.

Not only did they deduct that $1000 from my account (which should have come out of someone else’s account) but they also made me wait 5 business days till it got resolved on their end!!!

It’s their mistake … my $1000 which I could not access and potentially ran the danger of bounced checks .. and they tell me (yes, even escalating to managers) I have to wait on their time table for it to be resolved!!!

It would have created a nightmare if I bounced checks during this time all because of THEIR error. Is that insane or what?

P.S. Don’t get me started on CS pet peeves :)).

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Roger Dooley
Twitter: rogerdooley
11. February 2010 at 10:10 pm

Bank fees definitely came to mind as I wrote the post, Denise, thanks for bringing them up. These charges often have a “gotcha” feel that is the enemy of brand love.

Roger

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Dr. Pete 12. February 2010 at 10:26 am

I’ve had exactly that same reaction to the rental car gas prices. Even if I fill up my own tank and never pay that outrageous per-gallon fee, I still somehow feel like I’ve been cheated. If, on the other hand, they charged be $1.00-1.50 over the going rate or a flat fee for the fill-up, I’d probably take the offer to fill the tank, feel like I was getting a deal, and they might make more money overall.

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Jim Troth 14. February 2010 at 10:16 pm

Something that “pains” me is the thought of spending money and knowing that the money I paid will go even partly into the pocket of someone I do not like.

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