Are you wondering how you can win over shoppers with tight purse strings? You’re not alone! Price sensitivity is a complex phenomenon that varies from person to person and is influenced by a variety of factors. Luckily, there are some excellent strategies that you can employ to convert price sensitive shoppers. Let’s take a closer look at what price sensitivity is and which strategies are right for you.
What is Price Sensitivity?
Price sensitivity refers to how much a shopper’s purchase decision is affected by price. High price sensitivity means that shoppers will refrain from purchasing a product or service based on prices they feel are unreasonable. Low price sensitivity means that shoppers are not particularly put off by the price tag.
Price sensitivity is increasingly common as more and more consumers are becoming cognizant and savvy shoppers. These concerns about the price of a product or service often cause friction for potential conversions. In order to combat this friction, it’s important to know what factors affect price sensitivity for your consumers.
What Affects Price Sensitivity?
We all have different motivations when choosing to make a specific purchase. So, naturally, price sensitivity varies from person to person. However, there are some common influencing factors that we can analyze such as industry, competitors, store brand, personal emotions and needs, and geolocation. For example, there may be less price sensitivity in an industry with fewer competitors, as consumers do not have as many options to shop around for what they deem to be a better deal.
For some consumers, sensitivity to price comes from the need to save money. However, even wealthy shoppers and those with a healthy income are often after a good deal. For many, it’s actually the chase of the deal that motivates them.
It’s important to remember that price sensitivity is not solely about finding the lowest price. In fact, a high price may even give the impression of high quality. While some sensitive shoppers will focus on price alone, many shoppers are looking for the best overall value. So instead of discounting and sacrificing profit margin, try leveraging one of the strategies below.
5 Strategies to Convert Price Sensitive Shoppers
1. Payment Options
We mentioned earlier that personal emotions factor into price sensitivity. It’s no surprise that it emotionally pains some shoppers to hand over their hard-earned money. This can be true no matter how great a deal is or how high the value is to the shopper. This is where payment options come in.
By giving shoppers the option to pay off their purchase in installments, you can ease the pain that shoppers can feel when converting. This is especially true for younger consumers or those with a lower income. Offering payment options helps shoppers move through the sales process when they otherwise may not be in a position to purchase.
A downsell is a targeted tactic where you offer a shopper a lower-priced alternative. You may be thinking ‘wait – why would I want to lower the order value?’ Well, think of it this way: what if the alternative to a lower-priced order is no order at all?
Price-sensitive shoppers are masters of comparison shopping. Offering a lower-priced option can ensure that you don’t lose a potential sale to a competitor, while still giving the shopper the opportunity to leave satisfied with a purchase.
3. Save Your Cart
Speaking of comparison shopping, it’s not uncommon for a price sensitive shopper to visit multiple websites to ensure they’re getting the best deal. In fact, 81% of consumers run online price comparisons before deciding where to purchase. While some shoppers look to their friends and social media, price sensitive shoppers are putting in the research.
To remind the shopper of your offer in the midst of considering their options, use a ‘save your cart’ abandonment solution. Your series of follow-up emails will send timely reminders to the shopper to come back and complete their purchase.
4. Price Drop Alert
Everyone loves a great deal, especially price sensitive shoppers. For the shopper who isn’t ready to make a purchase, being notified of a price drop may just be the catalyst that converts them. Notifying shoppers about a price drop allows them to feel like an insider, making price drop alerts an excellent way to combat price sensitivity.
5. Offer Free Shipping
Since price sensitive customers are often highly informed, they’re looking for the best deal overall – including shipping. Market research shows that taking away shipping costs is actually known to increase average order value and conversion rates.
In fact, 73% of consumers are more likely to purchase online when offered free shipping. To further incentivize these notoriously difficult-to-convert shoppers, offering free shipping is a key strategy to consider.
Winning Over Price Sensitive Shoppers
Price sensitivity occurs when price points impact a shopper’s purchasing behavior. Being informed about this consumer behavior is the first step in combating it. The best plan of action is to leverage this newfound information to employ the pricing strategies that best suit your business.
Looking to Learn about More Types of Shoppers?
Check out UpSellit’s 5 Types of Shoppers. This in-depth guide covers the ins and outs of the different types of shoppers and how to win their hearts. It’s an amazing resource and it’s free! Download it now, or email firstname.lastname@example.org to speak with a conversion specialist and start increasing revenue today.