Today's Consumers Can't Get No "Status-Faction"

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Today

Consumer satisfaction is increasingly determined by the “perceived status” people get from the products and services they buy. This combination of status and satisfaction leads us to coin a new word: “status-faction.”

Status-faction is the phenomenon that has emerged as growing numbers of American consumers try to achieve what they perceive to be higher status by acquiring products that appear to be the best, the hardest to find, the most expensive, and the most likely to make their friends and neighbors jealous.

Today’s restless consumers are constantly seeking what’s new, and ruthlessly abandoning what’s old, even if “old” means last year’s must-have sports car, last month’s coolest iPod, or yesterday’s hip new cell phone.

Because status-faction is so fleeting, and product life cycles are so brief, the demand for the latest and best means that people can’t hold on to their possessions once they’ve been replaced by something that’s even better. This has led to three types of behavior that, on the surface, appear to threaten companies that depend on customer loyalty:

First, consumers prefer to rent or lease rather than own.

Second, they would rather switch to the hottest new brand than remain loyal to one brand.

Third, they prefer to dispose of yesterday’s goods instead of keeping them.

However, each of these behaviors can be turned into an advantage by any company that is willing to adapt its business model to profit from this trend.

For example, The Otto Club is a Massachusetts business that gives its upscale members all of the pleasures of owning a fleet of luxury sports cars, with none of the hassles of maintaining them. On a typical weekend, a member can cruise around in a $175,000 Ferrari 360 F1 Modena that has been delivered to his driveway, freshly washed, waxed, and with a full tank of gas.

As the company’s Web site explains the service, “The Otto Club gives you access to a collection of the world’s most desirable exotics, sporting cars, and touring coupes. The Otto Club lets you drive a wide range of cars – without the hassles and costs of traditional ownership. For customers seeking to maximize their status-faction, the Otto Club is a smarter alternative to ownership. Everything is included in the annual membership fee: insurance, maintenance, taxes, storage, cleaning… everything.

“Imagine the possibilities… Take a Ferrari Spider to a wedding. Drive a Lamborghini coupe to your summerhouse. Spin up the coast for a long weekend in an Aston Martin convertible...

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