C.H 5 & 6: Attitudes Based on High-Effort and Low-Effort

Costco is known for understanding the bigger picture before getting into the details as it is a 42.5 billion-dollar company. So what does this mean for the customers and how they view Costco as a corporation? When customers go to their local Costco they feel as if they are a part of a club due to the fact that without a membership you are not welcome inside of the store. Costco always makes sure to switch up the store depending on the seasons which keeps the customers and their attitudes going towards a positive direction. One thing that Costco has always done to catch their customers' eye is to hang up seasonal items. For example, in the summertime and wintertime, Costco will have swimming rafts hanging and big snowman statues so that no matter where you are it is visible to the eye. 

Another thing is that Costco makes sure to always keep their customers' culture in mind. With that being said Costco culture is predominant in the attitude, language, and behavior of the whole organization. One of the main characteristics of Costco’s organizational culture is to always keep a positive attitude. Courteousness and friendliness are emphasized in Costco’s organizational culture. The company believes these behaviors are important in attracting more customers to its warehouses/stores. This feature of Costco’s organizational culture contributes to its employee morale. Costco has never allowed employees to use the word "discount." The way Price’s mind worked was to focus on the lowest possible markup rather than the deepest discount. In Sol’s mind, the word discount equated with cheap. So the core ingredient in Costco’s addictive drug is its value proposition that stands for high-value products at the lowest prices. Consumers are addicted to Costco. The renewal rate is a whopping 90 percent each year. I guess that captures the power of an addict’s behavior. Renewing a Costco’s membership becomes a high-effort decision as it is a membership that only allows you to shop there with their Costco card. Costco has recently come up with a way for customers to renew their membership automatically. This high-effort decision now becomes a low-effort one as customers no longer need to worry about missing a payment. 

A great thing that Costco provides is online enrollment for customers which is an extremely low-effort option since no one has to leave the comfort of their home. They have also created an auto-renewal process for the members. This makes it more convenient for Costco members to renew their membership without the hassle. This makes consumers feel like they have one less thing to worry about. With a few clicks, they are able to set up their auto-renewal and carry on with their day. This is a low-effort decision for customers because consumers don’t have to think about the renewal process each year. 

With the pandemic that is currently going on this is amazing as it benefits both parties in various ways. Customers believe that shopping is at an all-time low and Costco is implementing certain strategies to make it safer for consumers to shop at Costco without having to worry about their safety. Costco has teamed up with instacart to accommodate the surge in shopping delivery which is making it easier for consumers to get their groceries. This is a fantastic low-effort decision that is being implemented as consumers are one click away from getting their daily necessities.

                                                  

Costco’s annual membership makes the store feel a little bit exclusive and more appealing. Consumers at Costco go crazy for a deal, and Costco has designed its entire strategy around this core tenet. For example, some products that are manifestations of Costco’s value ethos have become cult favorites people return for like their rotisserie chicken and sheet cake. Price is another factor because an October 2017 price comparison by J.P. Morgan found Costco prices to be 58% cheaper than Whole Foods Prices. This relates to the consumer’s attitudes at Costco because they will want to pay for a membership to take part in their deals.