A while back I wrote about the case of New York apartments without elevators. In 2011 I wrote,
I was surprised to read that there are still seven-story apartments in New York that do not have elevators and still rent to people. As you will expect, despite the location, the view and the benefits, these apartments are a bargain to those willing to hike 192 steps to get to their home. Apartments that go for $3500, go for $2000 – all because of no elevator.
There was clear value in the top floors and better yet there was more of it to come if you were to build more floors. Yet, no customer, except those in the most athletic form or those in dire need of a place with cheap rent, was willing to see that value and pay a price for it.
What use is a feature when its value cannot be realized or the cost to use the feature far outweighs the value?
Fast forward to the days when BitCoin is trading at $1,200. It appears there is indeed some segment that value apartments without elevators and are willing to pay a premium for using the staircase,
(a customer) pays $4,900 a month for a one-bedroom apartment on the fourth floor.
In the same neighborhood earlier this year, the rent for a fourth-floor one-bedroom at the West Coast, a large doorman building at 95 Horatio Street, was $4,475 a month.
“You can rent a one-bedroom at 95 Horatio Street all day,” said Mr. Sachs of Bold New York, who has handled units at the building. “One-bedrooms at 48 Bedford aren’t as big as at 95 Horatio, but your friends will walk in and say, ‘Wow, what a cool place.’ That is definitely worth something.”
Stairs, from being a hassle for some have become the differentiating feature in renting the apartment.
Not only are stairs more than usually important in a walk-up, but, he said, “you hear renters say that they are looking for something with character — that character is an amenity. The staircase is a great place to find that, because it is the place where interactions with neighbors happen.”
It sure adds more credence to the theory that it is customers who decide value and it is the job of marketer to understand that and deliver them a product that delivers them that value. Of course the marketer gets to share that value in the form of better price realization.