Last time I checked the big picture was kinda scary: chronic high unemployment, weak home prices, crushing debts that continue to build and printing money that debases currency. Recent polls show 59% of people make less money now than 5 yrs ago. To top it off, there’s also this weird human behavior that can only be described as an “unwillingness to deal with the problems” (aka-screw you).
The good news for you is this above listed economic cluster buck has created a new type of consumer behavior the alien nation refers to as “Less For Less”, That’s right humanoids are now more accepting of living with less than ever before.
Admittedly I’ve been a bit obsessed with Less For Less (LFL) and needed to spout off. It’s a simple concept. Consumers want the lovely experience you sell but less of it. They used to pull out their credit card and buy the whole pie but now they’re paying cash for a slice or two or three. They’re looking for smaller amounts of your products and services but still want the happy ending.
I have a client who runs a Heli-Skiing operation where the price elasticity window has moved downward even for some of the affluent. Adjusting with new price points and offerings, seven day trips may now be four day LFL jaunts (that still have good margins). A VP said, “As long as what you’re delivering still has value even rich people want LFL.” BTW, they are up year over year on these new products.
The cool thing about LFL? Earthlings may be getting more satisfaction out of it. Nearly 80% say they are happier living with less and a more back to basics lifestyle. It seems the current consume’anoid on a budget is pushing people back to the outdoors, family and friends. With the right products, prices and packages the bike industry could benefit greatly.
How about one more example of LFL? Let’s use snowsports again because of it’s similarity to the bike biz.
Copper Mountain Ski Area is a client who recently created a new pass product called the “Snow Day Pass”. For only $99 you ski for free anytime there’s four inches or more of new snow. With 42 four inch days last year and no restrictions or blackouts it’s a great value. It was a limited time offer and a sensible LFL that dropped $$ right to the bottom line. BTW…this pass product sold well!
Here’s some parting thoughts about LFL
-A LFL product may not be a single component/offer, instead think Lex Luger “total package”. (No apologies for the pro wrestling reference! )
-Be transparent about what you’re ‘eliminating’ to drop a price point. You’re not taking something away more than giving them the option to use it or not!
-Don’t build ‘fences’ around LFL offers, let ‘em have it when they want it
-Find and exploit the things you can ovedeliver on affordably and go for it.
-Be careful around the stuff with major cost implications, get creative, because this isn’t just about discounting.
It’s time to close with an example from my own con’slutting business. Six years ago ATC used to book mostly 12 month retainer contracts. Now it’s shifted to projects that have a shorter timeline and price tag. Yes, now even corporations want LFL. I’ve welcomed this change because some self obsolete’ing is a good thing for all of us. Plus it’s helped me from having to get a real job. 8-)
P.S. -While writing this post Apple rumored about a new Iphone release. Rather than upgrade the Iphone4 they’re going to roll out a new model that’s half the size and maybe half the price. This is LFL to the max, same experience just half the viewing area which millions of consumers will be satisfied with.