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Profiting on Others' Pain

5/17/2020

8 Comments

 
Face mask made of money

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

You’ve heard the saying, “Misery loves company.”  Here’s an even hotter take: Misery makes money.  Oftentimes the bigger the problem, the bigger the payout for solving it, but is it right for companies to monetize consumer misfortune, particularly during a pandemic?
 
Even as industries from airlines to entertainment struggle to survive the COVID-economy, some firms are enjoying record levels of revenue.  For instance, Peloton, maker of those expensive in-home ‘exer-cycles,’ has seen sales surge so much that it plans to reduce advertising spending by 50% over the next three months.
 
“Spinning” isn’t the only pastime the pandemic has accelerated.  People are more often binge-watching movies, having dinner delivered, and meeting friends online, which have boosted the bottom-lines of companies like Netflix, DoorDash, and Zoom.
 
Of course, there also are firms that have benefited even more directly from people’s fear of infection:  those manufacturing face masks, hand sanitizer, etc.  Clorox and Lysol, in fact, are selling antibacterial wipes so fast, their production can’t keep pace with demand.
 
In a non-pandemic world, the notion of companies making money gives many people pause, so the illness-associated timing of the latest corporate windfall has likely caused even more to wonder:  Is it right for firms to profit from people’s pain?
 
When you start to think about it, there are actually a number of businesses that appear to profit perpetually from consumers’ misfortunes, for example:
  • Auto collision centers
  • Divorce attorneys
  • Fire and flood restoration firms
  • Funeral homes
  • Pest control companies
 
These enterprises don’t exist unless individuals experience: crashed cars, ruptured relationships, domestic disasters, lost loved ones, and belligerent bugs.  How do the owners of these organizations sleep at night, knowing that their gain comes from their own customers’ pain?
 
The third industry on the above list reminds me of a disastrous 
event our family experienced on a cold January morning several years ago.  A pipe burst in our house, sending water streaming through several rooms.  The remedy included, among other disruptions, gutting our kitchen and having workers walking around our home for several months.  Fortunately, insurance covered the costs and the recovery company did a great job.

Water damage in kitchen

Did the restoration firm profit from our pain?  I’m sure it did, but it also ‘healed our house’ and helped us recover from the catastrophe.  When you think about it, all of the companies on the list above do the same sort of thing in different ways.  They’re all in the ‘restoration business.’
 
If one defines pain as an unmet need, or when an actual state is different than a desired state, almost every organization is in the pain management business.  Hospitals help people recover from physical and mental pain, grocery stores and restaurants overcome hunger pains, and educators try to alleviate the prospective pains of ignorance and unemployment.
 
So, it’s not just organizations that profit from other’s pain, individual consumers do too.  When I buy a pair of shoes that work well, the benefits I enjoy exceed the price I paid, meaning I profited from the retailer’s pain—its need to sell shoes.
 
Provided that the pain management goes both ways, or there’s mutual benefit, profiting from others’ pain is a good thing,
 
Unfortunately, however, there can be cases in which rewards are one-sided, such as when a firm’s business model depends on its own customers’ failure, thus purposefully prolonging their pain.
 
One example involves predatory lenders.  Such financiers intentionally choose customers who hold high credit risk and, therefore, are unlikely to meet their payment obligations.  When the debtor defaults, the lender comes out ahead by foreclosing on the home, repossessing the car, etc.  Any business model based on win-lose outcomes is unconscionable.  
 
Another more controversial example involves casinos.  I have no firsthand experience, but it seems self-evident that these companies don’t make money unless the vast majority of their patrons lose theirs.
 
A reasonable argument may be made that gamblers are really purchasing entertainment and an adrenalin rush, just like spectators at an exciting sporting event or theater performance.  A telltale sign of the difference, though, is that ads for Broadway shows don’t carry a disclaimer, “Musical addiction?  Dial 1-800-HAM-ILTON.”
 
Is it wrong for companies to profit from people during a pandemic or any other time?  It’s fine if firms enable win-win outcomes in which consumers profit back by getting good value from the hand sanitizer, face masks, food, clothing, Netflix, or whatever else they need.  Mutual profit is often a sign of “Mindful Marketing.”
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8 Comments
Michael Gelok
5/20/2020 12:38:20 pm

I agree with almost all of what you’re saying here. For the example of a casino I don’t think it is the owners truest intent to watch his customers suffer or whoever it may be utilizing their services. The idea behind this I think is similar to the sentiment that it’s better to give addicts clean needles, with the hopes of mitigating infection. I supposed to let them die by spreading horrible diseases to each other isn’t an attractive option either. (I’m using this extreme example with a purpose, not for shock value).

In some cases, things can appear to be win-lose, lose-win, or win-win. That’s why when it comes to hiring those who are in “pain and suffering business”, I believe it imperative for a consumer to try and judge the corporate intention, as well as the private intention (Person salesmen) of whatever services one might be interested in.
Regards,
Mikey Gelok

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David Hagenbuch link
5/22/2020 09:50:26 pm

Thank you for the thoughtful comments Mikey. I agree--the motives behind an action are very important.

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fayetteville exterminator link
5/28/2020 12:53:12 pm

Do you have other ideas for gardening with kids? I would love it if you shared them in the comments below!

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restorationspecialists.co.nz link
7/16/2020 07:13:36 am

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Daniel
9/16/2020 11:28:29 pm

Its very interesting how two different view points can have such a clear difference. In most cases, those companies sell products to help solve problems or issues. But if you look on the other side, its peoples pain they are benefiting from.

Reply
Pierson Castor
9/17/2020 11:21:38 am

Meet Robbert | Home Security Expert | SimplySafe Home Security - Single-Minded: It creates stakeholder value; everyone needs home security. But it does this with a comedic twist: having a “full-time burglar and part-time conman” promote the company. Even though this is purely comedic, it’s hard to say that the ad upholds societal standards.

First Visitors - Simple-minded: It upholds societal standards by comedically portraying a lack of decency and how disturbing it can be. However, it’s hard to say that it adequately increases desire for Snickers.

Who Has Three Parks, Has Missed You A Ton, And Is Open Again? Universal! - Mindful: It creates stakeholder value by advertising how much the company loves its customers, and it upholds societal standards by making the park safer and healthier during a public health crisis. It’s accommodating to peoples’ needs and wants.

All-New Nissan Sentra | Refuse to Compromise - Mindful: It creates stakeholder value by showing new safety features the car possesses, and it upholds societal standards by portraying a woman sticking up for herself in the workplace.

An Honor | McDonalds - Mindful: It creates stakeholder value by demonstrating how buying a meal at McDonalds can benefit the community and first responders, and it upholds societal standards by thanking those and, therefore, reminding us to thank those who have worked on the front lines during this pandemic.

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MckinneyVia link
5/23/2022 04:15:05 am

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restorerz link
12/29/2022 08:29:32 am

If you’ve been affected by a flood, don’t wait to get help. Contact a flood restoration service as soon as possible to start the process of repairing and restoring your property.

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