How can you convince customers that your products are worth their price?
Every target market is different and trying to use the same tactics on each demographic can yield less than satisfactory results. With that being said, you can’t approach price-sensitive customers with the same strategy that you use to reach customers who fall on the upper end of the spending echelon. You must adjust your marketing messaging to satisfy their needs.
Understanding the price-sensitive customers
As one expert puts it, “Price sensitivity can be defined as the consciousness of the customers to cost windows or range within which they make dealings.” By this token, every customer has some level of price sensitivity. But when we refer to price-sensitive customers in this article, we’re talking about those who are highly sensitive — individuals who respond negatively to higher than average prices and prefer to shop with budget-friendly brands.
Price-sensitive customers tend to be expert comparison shoppers. They’ll research four or five different websites looking for the lowest possible price before making a purchase decision. They also tend to be very informed in regards to the various features and aspects of the products they’re interested in.
Price-sensitive customers also tend to be price-sensitive across the board. It doesn’t matter if they’re shopping for groceries at a supermarket or a new car at an auto dealership.
While you may assume that price sensitivity has to do with the size of a customer’s budget or discretionary income, this isn’t always the case. Many price-sensitive customers actually bring in healthy incomes. Price sensitivity is less related to what’s in a customer’s bank account and more about their personal beliefs and upbringing.
Five marketing tips to help you engage them
Once you understand price sensitivity and what drives your customers to seek out budget-friendly options, you’ll begin to see opportunities for engaging them. The best way to reach these customers is through an aggressive marketing approach that meets them where they are.
1. Set the right price
You can’t very well create a strong marketing game plan if you don’t have the right price to start with. And just so we’re clear, the right price doesn’t always mean the lowest price. Think about Goldilocks from the classic fairy tale. Goldilocks wasn’t interested in extremes. Everything — including her porridge — had to be just right or she wouldn’t touch it.
“Just like Goldilocks, you need to ensure that your price is not so high that consumers turn to your competitors, and yet not so low that your products are viewed as low quality,” Lumina Datamatics explains. “Compare your prices against your defined competition using a tool-assisted market intelligence solution, and create a smart pricing strategy.”
2. Create a compelling value proposition
What’s your value proposition, and does it compel price-sensitive customers to do business with you? If the answer is no, then you need to reevaluate your focus.
Your entire value proposition doesn’t have to appeal to those who are looking for a deal, but it should encompass them. The best way to create a compelling value proposition is to focus on benefits, not features. The latter may catch a customer’s eye, but individuals who are truly price-sensitive are much more enticed by the tangible benefits of the product.
“People don’t want to buy web hosting, they want their websites online and accessible to web visitors,” marketer Pat Flynn says. “People don’t want to buy cooking ebooks, they want to invite their friends and relatives to dinner and have a good time. People don’t want to buy light bulbs. They want to be able to work or read at night.”
Your value proposition needs to sell benefits, not speak to how you’re a price leader in your industry. If you can sell the benefits well, then your pricing will speak for itself.
3. Publish the right content
With price-sensitive customers, content marketing plays a huge role in getting them to listen and move to action. Research shows that 81 percent of shoppers conduct online research before making a purchase, while 66 percent use a search engine to find the products they want. It’s impossible to reach these customers without quality visible content.
But simply publishing generic content isn’t enough. In an internet landscape that’s littered with worthless blog posts and press releases, you need to publish the right content.
In order to understand the role of content in influencing price-sensitive customers, let’s look at a real-world example. This article from Diamondere, titled 5 Surprisingly Easy Ways to Save Big on Your Ring, is a resource the company uses to build trust with customers. They share “trade secrets” in the form of price hacks for buying engagement rings. It mentions very specific nuggets of information about ways to save money (such as choosing gemstones that fall just below the carat or half carat mark), each of which strengthens the relationship between the customer and Diamondere.
This is just one example of many out there. The takeaway is that you should be publishing the right type of content that speaks to your customers’ needs. Work with your customers to show that you’re more interested in building a long-term relationship than making a quick buck.
4. Focus on good customer service
If a price-sensitive customer is going to pay a little bit more for your offering than a competitor’s similar offering, they need to know that they’re getting some added value. The most efficient and reliable way to add value comes in the form of customer service.
Good customer service can overcome a myriad of deficiencies in other areas. By paying attention to things like online support, fast delivery, and convenient return and exchange policies, you can build lasting relationships (as opposed to one-night stands that were the result of something like a flash sale).
5. Use urgency to drive sales
This final tip can be used in certain situations when you’re trying to unload a bunch of products or compete with a number of competitors at the same time. However, it’s not a long-term strategy.
Urgency can be introduced in a number of ways. It can be something as simple as using a strategically placed word in a headline, or as complex as offering a limited time offer with different price offerings in different time windows.
Because price-sensitive customers are such firm believers in research, urgency is often the one thing that will force them to speed up and make a decision. It’s a method of moving customers out of an idle stage and into a state of action.
Step up your marketing game
Whether you realize it or not, marketing plays a direct role in how you reach, engage, and convert price-sensitive customers. By developing the right story and telling it in a way that respects the need for affordable price points, you’ll find that dealing with price-sensitive customers isn’t a disadvantage. It can actually lead to more loyalty and higher sales volume.