It doesn’t matter what industry you operate in, or what you sell, consumer psychology research shows that there are three core groups of buyers; all of whom can be characterized by the “pain” they experience when purchasing something.
Whether you’re working in the marketing department of a financial services company, an aircraft manufacturer, a property developer, energy or chemical supplies or even a consumer psychology integrated advertising agency – it’s the same for every single one of us.
With neuroscientists defining human spending patterns as a process of “spend ‘til it hurts!,” it’s obviously important to understand these different levels of pain points, in order to maximising your potential sales.
We love a challenge, so let’s look at the Penny Pinchers
As they comprise nearly a quarter of your potential customers and they are the MOST DIFFICULT group to persuade, we’re going to share some of the smart techniques to reduce the buying pain that your Penny Pinching customers feel when purchasing from your organisation.
Fortunately, the secret is a simple combination of consumer psychology insight and well-executed creative, in the form of well-written copy that appeals to their apprehensive nature.
Compelling evidence from neuroimaging studies, shows that minimizing buying pain for penny pinchers (and everybody else) can be successfully accomplished by incorporating three simple strategies.
1. Reframing the Value of Your Offer
If you’re considering buying a product that costs £1,000 per year, you’d definitely approach the purchase with a little caution.
And you’d be right to. That’s because £1,000 a year isn’t small change.
To make matters worse, that £1,000 seems like a HUGE amount of money for conservative spenders.
So how would you feel if the product was just £84 per month instead? Not so bad, right?
You’re probably ahead of me here, but £84 per month is the same as £1,000 per year! But this kind of reframing really works wonders.
So if you’re offering something that has a recurring cost or that can be broken down into smaller increments, be sure to try and utilize this information into your pricing model.
2. Reducing Pain Points with Bundling
Neuroeconomics expert George Loewenstein recently carried out some research that shows conservative spenders love to complete their purchases in one easy transaction, rather than purchase multiple accessories separately.
His study is concerned with customers willingness to upgrade car packages in one go. Highlighting how difficult it is for the brain to justify each individual upgrade to leather seats, navigation systems, metallic paint etc as they create individual pain points in the customers mind.
Whereas a bundled purchase creates only one pain point, even though the collective price is far greater. Like a great many truths in consumer psychology, it’s counterintuitive but a proven outcome.
Loewenstein’s research shows that many consumers are willing to pay more for complete bundles because, not only is it less of a hassle, but it also results in fewer Purchase Pain Points.
3. The Devil is in the Details
The kind of scientific studies we especially love, are when response rockets through a very simple intervention.
And no, it wasn’t a “Nudge”.
That’s why we love this piece of research carried out by Carnegie Mellon University that reveals the impact of one single word on conversion rates.
All that the researchers did was test the assumptions made by Standard Economic Theory by changing the description of an overnight shipping charge on a free DVD trial offer from “a $5 fee” to “a small $5 fee”.
The results were an increase in the response rate among penny pinchers by an incredible 20 percent!
That probably deserves a little visual – because it’s such a BIG LEAP with just one little word:
Has the word “small” ever felt so enormous?
With a single word pushing up conversion rates by a massive 20%, it’s safe to say that when crafting copy targeted at penny pinching spenders, the devil really is in the details.
No matter what business you are in, it’s important to understand the three types of buyers. Selling to penny pinchers is especially important because they make up a large base of your potential customers. The right creative approach combined with consumer psychology insight can greatly reduce their buying pain.