What is the low cost model and how can you use it?

The Low Cost Model In High Demand

The Low Cost Model In High Demand

In 1995, a fleet of planes with ‘easyJet’ painted in bright orange across the body entered the airline industry. The airline followed a low cost model; consumers pay for an affordable ticket and in return receive a no frills flight to their destination on a relatively basic plane that doesn’t compromise on certain standards such as safety and customer service. Flights more reasonable than British Airways and of a higher standard than competitor Ryanair: travelling abroad became truly accessible to the masses and the industry experienced severe turbulence.

Fly forward 22 years and visit London Gatwick, and you could be mistaken for thinking easyJet owns the North Terminal due to their dominating presence from such continued growth. The success of easyJet and the easyGroup* as a whole seems to have set a precedent for brands looking to implement a low cost model to disrupt their respective industries.

Low cost model image

Take the gym industry for example; membership used to involve a high yearly contract giving you access to a huge amount of facilities such as Olympic swimming pools, saunas and steam rooms that most of us never used. However, in less than 10 years low cost model gyms have appeared on almost every high street. easyGym, part of the easyGroup, has been a key player in this burgeoning industry. They have torn up the rule book, giving consumers zero contracts, offering top of the range equipment, free classes and 24/7 access. They have done this by removing the areas of traditional gyms that add huge costs and receive little use. easyGym brilliantly demonstrates how ‘low cost’ can still retain ‘high value’.

The easy* brand is causing considerable disruption across numerous other markets too. The creation of easyProperty in 2012, again designed using a low cost model, could threaten to send the high-street estate agent the same way as the Dodo and the Dinosaurs. easyProperty offer the same expertise and services as your usual estate agent, but the most notable difference, lending itself to a low cost model, is the removal of high agency commission fees and physical bricks and mortar presence. Instead, the seller pays either £825 for the standard service pack, or £1500 for the premium offering. easyProperty re-launched itself in September 2017 following a £60m merger with GPEA and it will be very interesting to witness how it evolves.

The easy brand gives businesses such as easyProperty and easyCoffee an instantly recognisable image and brand that holds pre-existing emotional connotations and product benefit expectations within a consumer’s mind. However, it is still vital for each ‘easy’ brand to build its own brand strategy for its integrated marketing activities; from TOV, personality, design and photography style. Simply using the colour orange and putting 4 letters in front of a product or service will only get a business so far.

Low cost model businesses have exploded over recent years, including those not using the ‘easy’ brand, and there are surely many more industries waiting to be disrupted by this model. For example, companies have been spending large amounts of money for years on recruitment agencies paying expensive commissions; the same way individuals spent large sums on estate agent commissions – will the big recruitment firms be next in the firing line?

SWC Partnership is the appointed full service marketing agency for easyGym and Lufthansa’s low cost airline, Eurowings in the UK. Prior to co-founding SWC Partnership with a highly experienced integrated team, Co-Founder Simon Cristal worked on easyJet’s marketing.

To see our work for easyGym click here or if you would like to work with us, contact Simon Cristal at: [email protected] or phone 0844 887 0649

SWC Partnership is a Full Service Marketing Agency with offices in London & Tunbridge Wells.

*easy & easyGroup is the registered trademark of easyGroup Ltd.

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