Murphy's Law: Trading Up
May 16, 2008
You can get a good cup of coffee a lot of places, but how many of you would prefer to go to Starbucks? People don't want just an iPod; they want the iPod Nano. They don't want just a hamburger; they want what Five Guys offers. You may not have heard of them yet, but Five Guys is an 87-store fast food franchise on the East Coast that is changing the way people think about hamburgers. You could get a sandwich thousands of places, but people go to Panera Bread instead.
All of these examples have one thing in common - they are more expensive.
There is a marketing phenomenon called trading up, which is typically thought to include purchases of high-priced goods. In an environment where people are trading up, everything from food to HVAC is affected.
People are willing to pay more for good hamburgers or good HVAC solutions.
Ray Isaac, president of Isaac Heating and Air Conditioning of Rochester, N.Y., and current Air Conditioning Contractors of America (ACCA) national chairman thinks that his company’s growth and huge backlog is due to the fact that homeowners tend to nest during times of economic uncertainty. In other words, they put even more importance on their homes during a slowdown. They aren’t going to move soon, and they want to take care of what they have. They want to make sure they’re getting a good value.
Give real value to those people who want to pay more.