Moxy Hotels

Explicit trade-offs: customers accept less if they choose it up front

Like Avis's "We're No. 2, so we try harder" and Slate's no-frills $25K electric truck, a brand can offer less as long as the trade-off is stated in advance. Cost-cutting backfires when it is imposed on customers instead of chosen by them.

“So it was absolutely explicit. And in a sense, that's what, you know, Avis did with, we're number 2, so we try harder. This is, okay, we don't have the scale of the other guys, but we make up for it somewhere else. And the consumer's very happy making trade-offs so long as they're explicit. The problem with a lot of kind of cost reduction and efficiency pursuit in business is it isn't chosen by the consumer, it's imposed on them, which is a very, very different thing.”

Steal thisIf you're cutting a feature, announce the trade-off loudly in your positioning instead of hoping nobody notices.