The Value of Free verses The Cost of Free,
Have you thought much about Free? Some industries are, and maybe we should too. Southwest Airlines for example, a long time leader in the airline business has enjoyed huge success from their "No Hidden Fees Campaign" that they have been running for over a year now.
Continuing to push its value message, Southwest Airlines is ratcheting up its “no hidden fees” campaign for the fall travel season. New ads tout the fact that unlike many other airlines, Southwest does not charge for curb side check in, an aisle seat, phone reservations, snacks and checking in two bags.
“What you see is what you pay” says a voiceover in the ads. One new TV spot, breaking this week, shows the queue of travelers behind belting out the hallelujah chorus after the Southwest agent tells him there’s no charge for checking in two bags of luggage.
So what is the Cost of Free to Southwest for not charging for curb side check in, an aisle seat, phone reservations, snacks and checking in two bags, Likely not much, and perhaps is one of the many reasons that Southwest is one of the most profitable airlines in history.
Free Stuff That Matters
Something that struck me this week while traveling was the Free Breakfast and Free Happy Hour at Embassy Suites. Not only was it was free, but the closeness and alignment of Value to the Customer. All Free Is Not Created Equal
One of the key features of Embassy Suites is the Cooked-to-Order Breakfast, which consists of a breakfast buffet. The breakfasts are complete with various hot foods such as bacon, eggs, and omelets. In the evening, a complimentary Manager's Reception with alcoholic and non-alcoholic beverages, and appetizers are provided for all guests.
So what is the Cost of Free to Embassy Suites for not charging for Free Breakfast and Free Happy Hour, Likely not much.
Lets Relate This to Apartments
Todd Dubner had an interesting post this week over at Being Present, titled Apartment Features. The post talks about supply and demand, meaning what features people were selecting in their search criteria verses the amenities that advertisers claim in the description of their properties. It appears there is a mismatch, however, If Pets are the number one search item by prospects, and you do happen to allow pets, perhaps it makes sense to drop the pet fees.
The Value of Free for something like Pets in an Apartment is pretty high, why, because it taps into the prospects emotions. This is also compounded by the fact that 50% or more of your competitors don't even allow pets at any price.
What is the Cost of Free for Pets in Apartments, in our experience as apartment operator, not much. We have practiced No Pet Fees, No Breed Restrictions at Urbane Apartments for the last three years with much success. BUT, we mostly spin the play of We Love Pets at Urbane, tapping into the prospect's emotions with their beloved pet.
We are so quick to give away Free Rent, but so SLOW to move on certain ideas and concepts that have proven success in other industries. We would encourage you to utilize some of these ideas as a way to NOT Give Away Free Rent. Free Rent is forgotten about before the lease is even signed and has little to No Free Value, but a High Free Cost.