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6 Ways to Market to Penny-Pinching Customers

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6 Ways to Market to Penny-Pinching Customers

By Rieva Lesonsky, Guest Blogger
Published: February 19, 2013 Updated: February 19, 2013

The Great Recession technically ended back in 2009, but you wouldn’t know it from the way Americans are spending (and saving) these days. Despite some natural post-election optimism, issues such as rising food and energy prices, Congress’ “fiscal cliff” and debt ceiling struggles, and the rise in the payroll tax mean Americans are still clutching their wallets tight. With many Americans widely feeling that “we’re not out of the woods yet,” how can your small business develop marketing messages that resonate with penny-pinching prospects?

Start by understanding what your customers and prospects are worried about so you can tailor your marketing message accordingly:

  • A Gallup poll conducted last month reports that for consumers with incomes under $24,000, the costs of food and energy were the biggest concerns (cited by 81 and 80 percent, respectively), with healthcare costs (70 percent) and taxes (67 percent) close behind. Lower-income and middle-income consumers are being hit hard by the expiration of the payroll tax cuts in January, which cut about $1,000 in take-home pay from someone making $50,000.
  • Upper-income consumers (with incomes of $90,000 and up) were more likely than lower-income consumers to be worried about longer-term issues such as taxes (cited by 79 percent) and the federal debt ceiling (66 percent).
  • If you’re a B2B business selling to small business owners, know that they’re worried about the same costs consumers are. A recent Wells Fargo/Gallup Small Business Index survey found small business owners say taxes, energy costs and healthcare costs are hurting their businesses more than anything else.

So what kinds of marketing approaches will resonate with each of these groups?

Lower and middle-income consumers are worried about the short term. Their paychecks just got smaller while their cost of living is rising. As a result, they’ll be responsive to marketing that offers:

  • Immediate discounts. Draw them in with sales, coupons, stock-up-and-save specials or two-for-one offers.
  • The ability to stretch a dollar. Position your business as an advocate, helping them save for what’s important to their households. That could include offering flexible payment plans or layaway programs to help them afford bigger purchases.
  • Understanding. Emotion is important in purchasing decisions. Your marketing should appeal to these customers’ desire to provide for their families, treat themselves and have fun without breaking the bank.

While upper-income consumers have some of the same short-term concerns, they are more focused on long-term issues such as how taxes and government regulations will affect their future income and savings. As a result, they’ll be responsive to marketing that offers:

  • Flexibility. Upper-income consumers want to splurge when they can, but to do this they also need to save when possible. The three-tiered pricing strategy works well with this group. Develop a silver, gold and platinum package in the low, mid-priced and high-end range. Often, customers who might normally go for the lower price will be more open to buying a midrange package when there’s a higher-priced option, because they feel like they’re still saving money.
  • Value. Your product or service doesn't need to be rock-bottom priced if you can convey its ultimate value. In other words, is what you sell worth the cost because it saves time, saves money in the long run or will last 20 years?
  • Understanding. For this group, focus on the longer-term benefits your product or service offers, such as how it protects their investments in their homes, helps them become better at their jobs so they have more job security, or helps them create lasting family memories.

 

 

About the Author:

Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

Comments:

Your own advice with regards to promoting about value instead of price is a superb recommendation as well as it is not merely applicable in order to dime grabbing prospects. Any kind of customer might understand the worth revealed by simply enterprise entrepreneurs for your price they are having to pay.
I like how you mention that we should focus on value. My concern with focusing too much on price is that customers forget about value. My only concern is how to market or advertise value. It seems like value is spread more by word of mouth. Do you have any thoughts on that? Thanks for the article!
Great post. Thanks for sharing this very informative article. It is a great help and can be used when challenges encountered throughout the business.
Great tips!! I have been trying to find new and interesting ways to market to the "penny pincher". Have any extra tips I can use for my site to help market towards penny pinchers?
Your suggestion about selling on value as opposed to price is a great suggestion and it is not only applicable to penny pinching customers. Any customer would appreciate the value shown by business owners for the price they are paying. Racing to the bottom in terms of price is never a good idea.
I think that immediate discounts are some of the most important because it really resonates in the consumers mind. It's an instant gratification kind of thing.
I've been facing this challenge for a while now. Thanks for the great tips.
Great tips. Do you have any advice for service based and repetitive type businesses? (Psychologists and Counselors for example)

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