Time is money – Are you willing to pay?

Phillip Pitt Managing Director of Pacific Boating

It’s hard to remember a time without navigation, social media or emails available to us 24/7.

As consumers we have become dependent on solutions that will provide us with the one thing we all seem to never have enough of… time. Universally, we demand convenience in return for our hard-earned dollars and as technology continues to advance, so does consumer expectations. The problem for businesses however, is that convenience means different things to different people making it almost impossible to develop a general strategy.

While an abundance of industry specific factors will ultimately determine what convenience means to your market, we can understand that the sweet spot in consumer purchasing decisions can be achieved when there is a balance between commodity costs and convenience costs. In his article The Importance of Convenience in Consumer Spending, Eugene Kelly breaks down these variables as follows. Commodity costs are defined as the monetary value paid to the seller in order to obtain goods or services. Convenience costs are experienced through less tangible factors such as time, energy or the financial cost to overcome the disparity between the two.

So, we have touched on the current landscape is shifting to favour a reduction in convenience costs over commodity costs, but this does not mean that consumers are prepared to disregard commodity costs completely. The prioritisation of ease and time reduction in all aspects of everyday life means that businesses can no longer rely on competitive pricing for market acquisition. The two must work synonymously to provide a true cost of a product or service that addresses both aspects fairly.

Where we see this balance start to change is in the luxury or high-end sectors in industry. It’s not so much that convenience costs must significantly outweigh commodity costs, but justify the premium spent. For example, many of our members made the decision to give up ownership of their boats for our club membership. While there are certain limitations on flexibility in comparison to exclusive ownership, mitigating traditional hassles and absorbing substantial maintenance costs means that more time can be spent on the water when you really want it. Something goes wrong? We fix it. The boat needs to be cleaned? We clean it.

For our members, the relinquishment of some time consuming responsibility outweighs 24/7 access to their vessel. Ease and accessibility play a big part in our offering which can be customised for individual experiences. Our partnerships with other local businesses like Sydney Sea Planes and Nick Seafood Restaurant further validate our convenience focused model to include aspects outside our offering. If you have the money and lack time, the possibilities are endless.

It’s no secret that the world is speeding up. With so much stimulation around us we are becoming increasingly more impatient. I think we have all been in a situation where you are stuck walking behind someone on their phone with no way of passing. I bet you’re feeling stressed even thinking about it. This translates to almost every aspect of daily activities which as modern consumers we deem to be an inefficient use of time.

If someone can provide you with a solution that takes this stress away, would you be willing to pay?

 

Kelley, Eugene J. “The Importance of Convenience in Consumer Purchasing.” Journal of Marketing, vol. 23, no. 1, 1958, pp. 32–38. JSTOR, www.jstor.org/stable/1248014.

 

 

 

 

 

 

 

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