August 28, 2005
The Luxury of Choosing
Posted by Kevin | Print This Article
From an article at Fast Company’s website on how the long tail is changing the meaning of “luxury”:
“In the hospitality industry, for example, developer Ira Drukier is applying a set of rather narrow consumer insights to create a different kind of luxury hotel. As reported in The New York Times, Ira’s idea is that there’s a market in Manhattan for a hotel with small rooms; and even shared bathrooms and bunkbeds; so long as it’s equipped with wi-fi, iPod docking stations, and flat-screen TVs.
“Drukier figures that if the rooms are clean, neat and wired, he’ll attract young travelers whose only option at $125 a night is not nearly as, well, luxurious.”
Yeah, I’ll stay there! (Well, not in a bunkbed.) But the size of a hotel room has never mattered that much to me, even when I’m traveling on business and will have time only for holing up in the hotel — but I do care that the hotel is in a convenient location, the room is wired, the bed is clean and comfortable, and the TV is large and modern. Beyond that, it could be pretty much a closet and I won’t mind (I probably won’t even notice).
But I know lots of other people who would disagree strongly, and care much more about large rooms, lots of comfy furtniture, and the usual luxuries of a four-star hotel. Different things for different people; markets used to be put in three broad tiers (low-end, middle-class, luxury) but those markets have splintered. For one thing, the lower tiers now expect a lot of the things that used to be reserved for the top tier (style, cutting-edge technology, brand awareness). And for another thing, as Tim Manners points out in the above-linked FC article, “luxury” as we know it may be going away as “the long tail” works its magic (basically, “micro-niches” may soon offer more sales and marketing opportunities than mass markets).
Associations have traditionally had a fairly egalitarian mindset — dues gets access to the same array of services/programs/opportunities. Even if dues are broken down in tiers, such as many trade associations that charge differently based on things like revenues or number of employees, that difference in cost usually has little to do with the actual member experience, and is based on ostensibly objective criteria — in fact, there can sometimes be a total disconnect between what an association’s dues are and the individual value a member receives. (This is why you frequently read conversations on the ASAE listserve between association staff who are agonizing over different ways to “explain” their value to members.)
Starting several years ago, some associations began experimenting with “a la carte” dues, allowing members to pay differently based on the individual services they wish to receive. I’ve never been a big fan of the concept; for one thing, there are too many things central to many associations’ missions — such as advocacy, standard-setting, etc. — that are expensive but simply aren’t very marketable in and of themselves. (In fact, the reason many associations get into so many other business areas is because they need to sell those products to fund the things they can’t sell.)
But despite all this, something is going to have to give in many organizations as people begin demanding more individualized experiences — “micro-niches” are going to be served whether it’s by us or someone else. And, ironically, in order to fund the basic services that are central to an organization’s public service mission, I think many associations may have to focus a lot more of their marketing efforts on what some of their members want (and are willing to pay more for) and less on what all of their members need.
I’m a bit older than the demographic here, but of the folks around here who are that demo, the women would NEVER do a shared bathroom in a hotel. Especially if guys can use it too. Hopefully they’re doing research on that.
Other than that, interesting post and your last paragraph should be pinned to the wall of every association CEO.
Not this woman, Rich! I’d take (and have taken) a shared bath down the hall anyday, if the price were right. My last trip to NYC, I would have loved to have this type of thing available–the cheap hotel I stayed in had the reception desk behind bulletproof glass, and needed to. Very scary area. (I’d say afety trumps your own sink when it comes to must-haves for women).
Agree on that last paragraph! The question is how to do this in an economically feasible way.
Actually, I’d be pretty big on a private bathroom myself! I guess I just assumed there’d be choices with slightly higher rates for, say, a tiny room with its own tiny bathroom. Based on the typical experience of trying to save money in Manhattan (like your experience, Sue!) they could charge a little more for the convenience and still get a lot of takers (because they’d still be better than their price range/cheaper than the others).
I think we’re all making the original article’s point again — “luxury” markets have splintered into niche markets, and there’s money to be made in them thar niches.