Why Understanding Retail Pleasure Vs. Retail Pain Matters In Finance

Wharton Professor Barbara Kahn says that consumers want to buy things they want from brands they trust. If the market is competitive, then the brand should either add pleasure (think: luxury) or reduce pain (think: reduce frustration). She’s focused on retail, but we can apply her framework everywhere, even finance.

Trust isn’t supposed to be the easy part, but it is the obvious part. We have to show up every day, do the work, and build that reputation. That’s where brands come from. Pleasure/pain is a bit more complex. For example, discount and online brokerages focus on reducing the pain of commissions and access. It’s a quick and convenient hit. Full-service advisory practices add the pleasure of a personalized customer experience. Both do their job with intent.

Half-way between each camp is where strategy goes to die. Firms may be complex, but they need some stated purpose of either pleasure addition or pain reduction. Differentiation still boils down to perception. We win when we stay laser-focused on making sure the right signals are received. 

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