Someone's Making Money!

Papa Murphy’s – a Vancouver, WA based chain of take-and-bake pizza stores, posted a 17% increase in revenues for 2008 and also announced that they will be opening 100 new stores over the next five years.   Good for them!  They are clearly delivering value to the market place (no pun intended) by saving people time and money on their meals.

We are experiencing the most dramatic shift in consumer behavior since the Great Depression.  Savings are up and consumer debt is declining for the first time in the history of debt.  And, with this shift will also come a shift in consumer beliefs, attitudes and perceptions.  When consumers consume, they are exchanging their money for a combination of time and energy.  This is a calculation that happens in their minds, and consumers are constantly balancing the trade-off between how much something costs and the time and energy it gives them. 

Here’s a simple example: If you were planning a trip between Portland, Oregon and Washington, DC how would you get there?  The majority of you would fly.  Why?  Because flying represents the most efficient means (time, energy for the money) of travel.  You could drive, bike or walk.  But when you place any amount of value on your time and energy, that makes those options pointless.  Below is a chart I made that estimates the amount of time, how much exertion, and what it would cost for each of the modes of travel. 

You would need a compelling reason to travel by any other means than airplane.  This example just illustrates the fact that consumers constantly balance these three things when making decisions about what they buy.  As behaviors changes, so does the need for organizations to adapt.  If your business no longer adds value in the eyes of the customer, then you had better start to find a way to change.  People will keep spending their money, but are likely to place more value on what their time and energy are worth.

Tags: Consumer Behavior

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