In marketing, we have two “pains:” pain points and price pain.
One of the reasons online marketing is so successful is that smart marketers know their niche, that is, their prospective customers. In particular, they know their pain points – the things that cause them the most problems. Knowing their pain points allows you to offer them real solutions to their issues through the products and services you sell.
Price pain also referred to as “spending pain” or “buyer’s remorse,” can be defined as a person being either upset by the amount they have to pay or regretting the purchasing decision once they have bought the item.
We can see the effect of price pain if we look at the rate of shopping cart abandonment online, which varies between 60% and 80%. This means that the consumer goes through all of the steps involved in shopping such as searching for products and putting them into the cart, only to balk at the last hurdle and click away rather than pay and complete the transaction.
There are several reasons for abandonment, but the most common is what is termed “sticker shock,” Hence, they are surprised when they see everything added up on the page and the final total is revealed. This is often the case due to taxes, shipping and handling, and other fees, which often make the “bargain” they were hunting for look like much less of a good deal.
We can also easily see the effect of buyer’s remorse in return and refund rates. Some people will regret the purchase so much, simply by having spent the money, that they will ask for a refund. It might have nothing to do with the quality of your product at all, but rather their state of mind – that of simply finding it too painful to “indulge.”
This is why a 100% money-back guarantee, no questions asked, can be a great way to try to win over the tightwads. It makes it risk-free to do business with you. It also makes it easy to deal with refund requests because your customer service people don’t have to argue about the reasons for the refund.
Price Pain – a la Carte versus Buffet/Meal Deal
Another price pain you can address easily is to offer a “buffet” or “one price for everything” deal rather than a per-item price.
We can see this at work with the McDonald’s Happy Meal. If they were to buy the burger, fries, and drink separately, it would make tightwads much less likely to buy all three. By offering a complete meal for one low price, they feel they are getting a good deal. While McDonald’s won’t get as much money as they would if the items were purchased separately, they are certainly getting a lot more than if the person were to order only a burger.
Don’t nickel and dime your customers. Put together a great deal for one low price. Be prepared to absorb the cost of the taxes (if any) and the shipping and handling fees into your one all-inclusive price.
Price versus Need and Value
The price paid will vary depending on how much the person needs the item. For example, a tightwad person might not be happy about the cost of toilet paper, but they know they can’t live without it. Then it is a case of perceived value. Which brand is best?
A bundle offers real value. Add even more items to create higher perceived value. Emphasize why they need the item and its benefits. For example, create an ebook with a free audiobook version they can download, plus checklists and a workbook, and this will boost the value even though it will cost you little to create these extras.
Understand pain points and price pain, and your marketing messages will speak to the needs of even the most tight-fisted shopper.