Another great hack for any business is to identify opportunities to sell convenience items.
The Convenience Item Defined
A convenience item is a product or service that is available at the right place and right time for a customer. These are items that are often sold at a premium price compared to what a customer could purchase the item for if they bought it in advance, at another location, or in a larger quantity. The end result is that customers are willing to pay more for an item when a business offers the item at a time and/or location that is convenient for them – meaning the value proposition is convenience rather than price.
Convenience Item Examples
An easy to relate to example of a convenience item is food in a vending machine at a hotel or workplace. While we normally wouldn't want to pay a couple of dollars for a small bag of chips or a single serving soft drink, the convince of not needing to drive to a store satisfies our hunger and is worth a premium price.
Over the past several decades, gas stations have adopted a business model of selling convenience items. For this very reason, we now call many gas stations by the name of “convenience stores” rather than “gas stations.” The stores sell convenience items like milk, Eggs, chips, and other common items that traditionally needed to be purchased in a grocery store. The benefit to the customer is that these convenient stores offer a quicker alternative to purchase common items than the time it would take to drive to, walk-through, and purchase the same item from a grocery store that would likely offer a slightly lower price.
There are many other examples of convenience items sold by businesses today. For example, many airlines now offer in-flight Wi-Fi for a premium price. On the ground, Wi-Fi can be found for free almost anywhere – including the restaurants inside airports. But in the air, the person who is used to being connected to the internet has traditionally been unplugged until the flight lands. Therefore, the convenience of being able to connect to the internet during a flight has become a convenience many travelers are willing to pay for.
A final example of a convenience item is valet parking. While some people would never consider paying a fee to have someone else park their car, there has been an entire industry created around valet parking.
When a business has a good understanding of their target customer, they will be able to identify products and services that provide a convenience to their customer base. These convenience items will allow for additional revenue generation for the business.
Business Hack Application
It is important to understand that the value proposition of a convenience item is not the price the customer has to pay – it is the availability and convenience of the product. While some customers are always price sensitive – meaning they will do what ever it takes to purchase a product at the lowest price available – many customers will be willing to pay a premium for a product if the value proposition (the convenience) appeals to them enough.
When offering a convenience item, a business must ask themselves why a customer would be willing to pay a premium for a product they could ultimately get somewhere else for a cheaper price. There are three main factors to consider when determining what products or services a business may offer as a convenience:
- Time: The first reason a customer may be willing to pay for a convenience is time. In today’s society, time is money. And because of this, many people are willing to pay a bit more for something that will save them a few minutes. And if this convenience will save them from unnecessary frustration and headaches - such as waiting in long lines or jumping through a number of hoops – the value proposition becomes even more appealing.
- Quantity: The second reason a convenience item adds an increased value to a customer is when a business offers a product that normally isn’t available in small quantities. Sometimes customers don’t need large quantities of a product or service. Therefore, when a business offers a smaller quantity – even at a price that may be similar to the larger quantity – the customer is able to get what they need without receiving extra, unnecessary products.
- Scarcity: The final reason a customer may be willing to pay for a convenience item is scarcity. The idea behind this is supply and demand. If a business is able to identify a product or service that isn’t readily available – such as water in the middle of a desert – then a business will find that customers are willing to pay a premium for this convenience.
What convenience items could you be offering to your customers?