If you’re finding it tricky to get price-sensitive customers to open their wallets and buy, here’s how to help convince them:
But before we get into that, it’s helpful to understand that there are fundamentally three types of buyer personas you must convince:
1. Tightwads — “I’m not spending a penny unless you pry it out of my tight-fisted hands.”
Tightwads love to save and loathe spending. This makes them cling onto their money as long as they can before reluctantly parting with it. These are the 24% of people that you need to work hardest to convince because they need serious leverage to be persuaded to open their wallets.
Think Scrooge and you won’t be far wrong. They love their money, as long as it’s sitting safely in an extra secure savings account.
2. Spendthrifts — ”I’m going to spend everything I’ve got… and then some!”
The Shopify store owner’s dream customer—spendthrifts are the impulse buyers we all hope we can hone our Facebook pixel to target on a massive scale. They love spending money, it’s their favorite pastime.
Spendthrifts represent about 15% of buyers and the type of people who are loved by credit card companies. They will keep spending until they max out their card, then reach for the next and keep going.
They’re a cinch to convince, just mention the word “bargain” or “sale” and they’ll tap in their credit card details faster than you can say “minimum monthly payment.”
3. Average Spenders — “If it seems like a good investment, I’ll purchase it.”
This type of buyer represents about 61% of shoppers. They spend what they think is appropriate after carefully weighing up the options, They like to make smart buying decisions and haggle for a discount where they can.
But regardless of the buyer’s spending persona, whenever I’ve analyzed visitor intelligence gathered on my own or client’s sites, price is always an objection that comes up.
The thing to remember here is that even spendthrifts won’t buy if they have objections that go unanswered. So your job as an e-commerce store owner is to answer and overcome every conceivable sales-objection in order to win the sale.
Satisfied, loyal and returning customers are less focused on price. They understand your value and appreciate it. That’s why it’s a good idea to create a customer loyalty program to keep them coming back once you’ve got them in the door.
Have a rock-solid value proposition
This is the prelude to overcoming any price objections for the “average spenders” who make very considered purchases. Without a compelling reason for this type of shopper to buy from you, the chances are, they’ll bounce straight back to Google looking for a cheaper price elsewhere.
Once you’ve established this and provided basic reassurances to overcome any anxieties around trust, you stand a better chance of keeping someone on your site long enough for them to evaluate your prices.
For the tightwads, they’ll likely look at the price first before taking into account your value proposition and trust factors.
If you still haven’t tackled crafting your value proposition, read this.
Tap into your buyers’ wants
Shoppers are more price sensitive to the necessities of life. They are less sensitive to things they want. When was the last time you knew of someone haggling over the price of a new Porsche?
When you tap into the buyer’s wants, price is less of an issue. This is where you’re going to have to hone your copywriting skills.
If your product warrants a long-form sales page like athleticgreens.com then you can do a proper job of talking-up all the benefits to amp-up their desire as well as handling all the sales-objections.
Compare with other competing products
This tactic is only viable if you can shine a light on your products in a way that avoids creating too much curiosity so that people end up disappearing to your competitors’ sites.
Offer a payment plan
Credit is intangible, shoppers will spend more on plastic than cash. It’s the same as chips in a casino. Offering credit is a great way to not only overcome price objections but also to increase your Shopify store’s average order value.
If you show shoppers a higher price first, it becomes anchored in their minds which makes the other options seem better value.
Avoid surprise shipping costs
There’s nothing that will make shoppers abandon their cart faster than unexpected or unreasonably high shipping costs. My advice is to irradicate this potential objection entirely and this article goes through this important subject in detail.
Subscribe & Save
For the bargain hunters that want convenience too, subscription orders are a win – win for you as the store owner and the buyer.
Switch the reference price
Instead of allowing shoppers to compare prices with similar products, switching the reference price can bump up the perceived value of your product.
Trivializing the Price
If you sell high-ticket products an easy way to reduce the perceived cost is to break the price down into a daily, weekly or monthly equivalent.
On the other hand, you could compare the daily cost to something people habitually buy like a daily coffee.
Demonstrate the value
Simply telling shoppers how great your products are to try and justify the price won’t cut it. You need to show them exactly what goes into sourcing or creating your products.
Sell time over money
Here’s an interesting study conducted by Jennifer Aaker, the General Atlantic Professor of Marketing at Stanford Graduate School of Business, that shows how consumers value time more than money.
The research involved setting up a lemonade stand with 3 variations of signage:
- “Spend a little time and enjoy C&D’s lemonade” (focus on time)
- “Spend a little money and enjoy C&D’s lemonade” (focus on money)
- “Enjoy C&D’s lemonade” (neutral sign)
The results ram home the importance of writing benefit-focused copy…
The first sign not only attracted twice the amount of customers but surprisingly they were also willing to pay twice as much for the lemonade as well.
It could be argued that money will always be thought of in a negative way because consumers are reminded of the cost of acquiring a product rather than the pleasure of consuming it.
So with this in mind, a follow-up study was conducted Aaker and her team where they took a poll at a free concert. Even though the concert was free, people had to wait in long lineups to get good seats.
The research team asked the attendees one of two questions: “How much time will you have spent to see the concert today?” or “How much money will you have spent to see the concert today?”
In most cases, asking specifically about time increased participants’ favorable attitudes toward the concert. In fact, those who had incurred the most “cost” (standing in line the longest) rated the concert best of all.
So what are the implications of this research? According to Aaker:
“One explanation is that our relationship with time is much more personal than our relationship with money. Ultimately, time is a more scarce resource—once it’s gone, it’s gone—and therefore more meaningful to us. How we spend our time says so much more about who we are than does how we spend our money.”
Specifically discussing the concert study Aaker noted:
“Even though waiting is presumably a bad thing, it somehow made people concentrate on the overall experience.”
So how does this apply to overcoming price-objections for your Shopify store?
When a product is already good value, emphasizing the time you’ll enjoy by using it (or the time it will save you) is likely more persuasive than focusing on the monetary savings.
But be warned, if you’re selling luxury goods, emphasizing time may fail according to according to professor Mogilner: “With such ‘prestige’ purchases, consumers feel that possessing the products reflect important aspects of themselves, and get more satisfaction from merely owning the product rather than spending time with it.”
So, keep in mind that premium goods with premium prices should emphasize their quality and ignore the time saving or enjoyment of time.
On the other hand, if you’re selling price sensitive products, future-pace your shoppers into seeing themselves enjoying the time spent or the time saved with your products, rather than putting all the focus on the price.
If there’s one thing you can count on as a Shopify store owner, it’s that consumers will always want lower prices. And once a consumer spends money online, he wants immediate gratification. So for an online retailer, there’s nothing more important than price and availability.
The Shopify stores that will win at e-commerce will offer products at low cost and deliver them quickly—and, often, free of charge.
It takes just a few clicks for shoppers to figure out the market price for any item on the internet. You don’t have to be the cheapest on all your products all of the time. But you should be rock-bottom on those items your customers will use to judge you. Consumers are pretty savvy; for the most part, they won’t pay more than they have to. Never forget this.