The $25 NYC-DC Bus: Another Real Life Marketing Lesson

This coming Tuesday, I’ll drop my daughters off at school, return to my house, pick up my trial bag (which doubles as a suitcase and computer case for short trips) and walk 15 minutes to the $25 bus that runs from Bethesda, Maryland, where I live to Penn Station in New York.   I’m headed up to New York for an event filled 24 hours that will include a stop by the ALM Legal Tech Show (where I’ll hopefully be posting some dispatches for Legalblogwatch), dinner with a bunch of NY based solosezzers, and a bunch of blog or book related meetings.

So why am I taking a $25 bus up to NY instead of flying or taking Amtrak?   For me, it’s mostly convenience — the bus is so close to my house, I don’t need to allow extra time (that I don’t have with my tight schedule) to get to the bus, as I would with a trip to the airport or Union Station in D.C.  Plus, a benefit of taking the bus on mid-week is that the trip will be traffic free and the bus won’t be filled, so I can expect a double seat to myself.  Still, more than anything, this $25 bus phenomenon intrigues me; it’s a market that didn’t exist back when I was in college and not even as recently as ten years ago and it’s a market that’s absolutely booming because it fills an until-then unsatisfied demand.

Before the $25 buses, students and other travelers had limited options.  For students or frequent travelers, flying and Amtrak are often too costly.  Plus, as I just mentioned, allowing enough time to get to the plane or train can add an extra hour on to what should otherwise be a short trip.  Driving might work for some some of the time, but has its own problems:  with gas prices and tolls, the costs can add up, a weekly drive can be wearing for regular travelers, carpooling or ridesharing isn’t always convenient and many students don’t have cars.  And most travelers would not take commercial buses like Greyhound or Peter Pan, which might make 20 stops between DC and NY or NY and Boston and take 6-7 hours for what should be a 4 hour trip.

Enter the $25 bus concept (like Vamoosebus).  You register for a seat online, pay cash on the bus and travel directly from DC to NY or NY to Boston.   I chose Vamoose because of its proximity to my house, but other competitors stop at different locations both in DC and outlying areas.  Some of the buses are now even offering Internet access.  From what I can tell, the companies are low cost, no frills operations.  Presumably, they pay insurance bus maintenance and driver salaries.  But there’s virtually no advertising – perhaps a small Google ad or a flyer hanging up in the local coffee store –  information spreads primarily by word of mouth (which is how I learned about the bus).  There’s no customer service – you register on the Internet and pay cash to either the driver or a local person who boards the bus to collect the money.  Clearly, these companies aren’t making millions, but they run at least 8-10 filled-to-capacity buses on the weekends as well as many other partially filled buses throughout the week.  So I guess that these companies are recovering their costs and generating profit.

So why does the $25 bus concept work?  My best guess is that it captures a huge amount of traffic from people who otherwise would never have taken most of those trips to begin with because the costs were prohibitive.  In my own case, my husband works up in NY and commutes back and forth on the bus.  But  without the bus, we probably would have relocated by now.  And I’m sure that there are many who now find it feasible to take a trip to NY or Boston on a whim just because of the cheap prices.

That’s the challenge for most of us as solo and small firm lawyers – to devise a “too cheap to be true” idea that captures clients who otherwise would never have hired a lawyer to begin with.  At the same time, the concept needs to generate a steady stream of revenue that compensates for what is likely a narrower profit margin.  I know that some firms accomplish this through “service packages” – where a company pays the lawyer a flat fee of between $500 and $1500 per month to perform X hours of services that an inhouse lawyer would typically offer, e.g., review contracts, draft leases, etc… I helped form a trade association, where companies pool their money to pay for the legal service, lobbying and PR work that the association provides to members.

What about those who say that offering bargain rates will only attract losers and deadbeats and those who don’t value our services?  Well, here’s what’s so non-intuitive part of the $25 bus:  that many people who could readily afford to take the train or plane (such as myself), take the bus anyway because of convenience or because quite simply, they take pleasure in a good bargain. Lots of corporations and small companies don’t want to pay $500/hr to a large firm to handle routine matters when they can get the same quality from a flat fee plan where they pay a lower effective fee and don’t face uncertainty of huge costs to boot.  And, with so many marketers and value billing gurus advising lawyers to spurn all clients except those willing to fork over a $20,000 flat fee without blinking, I think that there’a a huge market for ordinary clients with tight budgets but who are willing to pay a reasonable amount for legal services provided that they receive good value.

Do I think that lawyers should limit themselves to providing “$25 bus service?”  Absolutely not.  But it might be just the ticket to bringing in a steady base income that you can reinvest in other marketing measures to reel in more lucrative matters.

So readers, tell me – what’s your $25 bus idea?

Note:  For previous posts on real life marketing, see here (about lessons from IKEA) and here (lessons from my Las Vegas trip).