Today’s business climate is intense, with numerous businesses offering the same or similar advantages. A study has shown pricing to be a distinguishing factor for consumer decisions. This is especially true for low-involvement items, as buyers tend to perceive them as commodities and have a variety of alternatives. Price sensitivity involves measuring how much the cost of services or goods will affect a customer’s willingness to purchase. Several factors influence this, including product type, uniqueness, consumer attitude, and disposable income. Generally, the lower the sensitivity, the better for your business. The tips below can help you lower price sensitivity for your customers.
- Direct customers to your differentiating factor
It is advisable to direct customers’ focus to your product value and what they stand to benefit from when they purchase. For instance, customers may gravitate towards cheaper products if they are unwilling to pay extra for the premium features you have added to your recent offerings. Fortunately, you can remedy this situation by pricing various product models based on their expected life span instead of manufacturing complexity. This approach will highlight innovation and teach your customers new ways to compare the products.
- Build a solid brand
Product prices can significantly influence the willingness of the target market to patronize it. However, the less pricing influences buyers’ decisions, the better. It demonstrates that customers trust your brand well enough and don’t prioritize your product cost. Customers that are less price sensitive are likely to be happy with a product they purchased from you. This is usually the case if they have a favorable connection to your brand. Consequently, it would pay to invest in improving your brand and how customers perceive it. You can also use distinctive brand assets to encode your brand and products to consumer brains, which can be difficult to achieve only with branding. Using the right distinctive brand assets can be useful for establishing brand loyalty and reducing price sensitivity over time.
- Offer the same price for individual relevance
Allow your customers to choose products or solutions that cater to varied preferences while maintaining the same pricing range. Buyers sometimes don’t appreciate the marginal benefits between products when their unique offerings are low. As a result, people are unlikely to pay a premium for a product that does not appeal to them. In this case, it is ideal to price all items at the same cost to provide value to your customers’ preferences.
- Review delivery charges
Delivery costs can inflate how much a customer spends in total to purchase from you. Unfortunately, this can turn them away as a study shows that approximately 74% of shopping online is abandoned due to high shipping and delivery prices. Therefore, it is advisable to review your delivery prices from your clients’ perspectives to determine if they are acceptable. Alternatively, developing your own distribution system rather than depending on third-party carriers may benefit you and your clients.
- Intentionally overpricing to raise curiosity
Overpricing can help people remember product features more easily and evoke an emotional reaction. For instance, coffee may be free in some locations, but Starbucks has a price tag. Customers aren’t charged a premium because they are excessively wealthy or because of coffee quality. Many people attach quality and value to products sold at a premium. To keep your profit margin intact, state your price confidently and stand your ground. Additionally, getting used to customers’ reactions over pricing can help you overcome price-reduction attempts.
- Allow customers to explore the benefits of your products
Making the market a battleground between you and your rivals to demonstrate the benefits of your products or services is sometimes pointless. That is because customers are less interested in special features that add little or no benefits. So demonstrate to your customers the genuine solution or advantage that your product or service may provide. Knowing what makes your products or offerings more desirable will help you develop and advertise them more successfully to reduce price sensitivity.
- Invest in customer services
The most difficult aspect of selling value to clients is convincing them about everything your product offers. Aside from making the entire purchasing process convenient, ensure they understand you’ll be there to deliver excellent customer service. Some businesses keep customers focused on pricing because they have a fundamental cost advantage to exploit. However, you will benefit more by encouraging people to think more deeply about value rather than merely the price tag. And you can do this through your customer service.