Guest Post: 4 Ways to Make Your Customers Less Sensitive to Price

The following is a guest post.  This post does not necessarily reflect the views of Suzanne and David E. McClendon, Sr. or Manian Debil Productions.

4 Ways to Make Your Customers

Less Sensitive to Price

Consumers historically have demanded affordable, high-quality products. And quite often, they’ve looked for bargains, or the lowest price possible without sacrificing quality.

In today’s ultra-competitive retail world, which faces cost-conscious customers who consider more buying options than ever before, those businesses are finding that price is usually the first factor customers consider before purchasing. An article in RetailDive noted: “Retailers’ top business challenge has long been – and continues to be – consumer price sensitivity.” A survey of retailers’ pricing strategies by Retail Systems Research showed consumers’ top issue is when they can find a lower price elsewhere.

And sometimes, the price can even drive them away from a brand they’ve favored. The Wall Street Journal reported that giants of the consumer goods industry are no longer safe bets for investors, partly due to price sensitivity among consumers.

“Price sensitivity is increasing,” says Larry Light, www.arcature.com), a global brand revitalization expert and co-author, with Joan Kiddon, of The Paradox Planet – Creating Brand Experiences for The Age of I.

“Customers are no longer willing to spend large premiums for many major brands. In a changing world, consumer goods giants must do a better job of understanding the price sensitivities of their brands. Price sensitivity is the ultimate measure of brand health.”

Light gives retailers four tips to reduce price sensitivity and make their customers buyers:

• Build your brand. “Usually in the past, when faced with a multitude of similar products, people often fell back onto brand loyalty rather than risk a brand they don’t know as well at a cheaper price,” Light says. “But that’s not as true anymore. A brand’s price point that was viewed as a great value five years ago may not be as viable today. Has your brand value plateaued or regressed?”

• Focus on the quality, not the price. Studies have shown that online searches can increase price sensitivity, so it’s important to provide more information on company websites regarding quality. “Show ways your product has value outside of the price,” Light says. “Consumers generally want a useful, dependable product first. They want a brand they can trust. Compete on what you get for what you pay. Emphasize your strengths and don’t undersell your value.”

• Don’t compare your features with those of competitors. Getting into a feature-matching war with competitors can draw retailers away from their core strengths. “You want to retain your unique flavor,” Light says. “Point out differences by emphasizing what your features do for your customers. Tell your customers about the benefits of using your product or service, how it will help them. They don’t care about a list of features as much as they want to know how it will benefit them.”
• Remember: customer service is vital. This is a significant part of the added value, Light says, justifying paying a little more and winning over a price-sensitive customer. “The most efficient and reliable way to add value comes in the form of superior customer service,” Light says. “Pay attention to things like online support, exchange and return policies, delivery, and you’ll build and strengthen brand loyalty.”

“Price sensitivity is a real issue in today’s economy,” Light says. “More than ever know your niche, your audience, and make the benefits of the brand experience the main factor in the buying process. And, track customer perception of your brand’s price sensitivity. It is the ultimate measure of brand health.”

About Larry Light

Larry Light, a global brand revitalization expert, is the Chief Executive Officer of Arcature (www.arcature.com), a marketing consulting company that has advised a variety of marketers in packaged goods, technology, retail, hospitality, automotive, corporate and business-to-business, as well as not-for-profit organizations. Prior to consulting, Light worked on the advertising agency side as a senior executive at BBDO and CEO of the International Division at Ted Bates Advertising. He was global Chief Marketing Officer of McDonald’s from 2002-2005, where he was involved in one of the most recognized brand business turnarounds. From 2010 to 2014, Light was Chief Brands Officer of the global hotels group IHG.

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