Five Key Approaches To The Frugal Mindset
As we analyze the decision-making needs of this new frugal mindset, we are encouraging our clients to consider these five approaches to help them turn customers' new decision-making needs to their advantage:
- Prepare your front line. As people grow more cautious, they will need a lot more personal attention and hand-holding to get them through their decision-making. This is the time to invest in giving your sales force and customer service staff the information and training they need to better empathize with their customers so they can more easily move people from consideration to purchase.
- Recognize your real competition. You're not just competing with other products and services like your own. When people are cutting back, they are more likely to trade off among different desires: contribute to an IRA or put a down payment on a car; take a vacation or buy a TV; buy a whole new outfit or just a new blouse to do the trick.
- Help your customers evaluate alternatives-including doing nothing. Provide tools and information to help people calculate costs and benefits and make choices among options. Stress the cost of not acting-show your customers what they lose if they don't fund their IRA or visit their doctor. Putting off buying a new, more fuel-efficient car could mean many extra expenses for maintenance and gas.
- Help your customers justify the purchase. Even in difficult times, people will act if they believe the benefits outweigh the costs. Can you demonstrate how you can help lower maintenance, improve health, or reduce energy costs? When people are being cautious, their horizons get shorter so if you can, show your customers that they will see quick returns. If your product costs more, does it also come with higher service or more features? Will they get better results?
- Plug into values. Now more than ever it's important to understand your customers. Is security important, or gratification? Are they saving for an education, a house, or retirement? Are they looking to enhance a career or change direction? These differences are important at all times, but when people are making trade-offs, it's especially important to know which values are most important to their decisions.
Remember, too, that even though people are weighing their decisions more carefully, they still make their decisions with their hearts as well as their heads. Make sure you give your customers reasons to feel good about the decisions they make.
When customers are in a frugal mindset, they are still making decisions. In fact, their decisions are even more important because the cost of making a mistake is greater. As marketers, your job is to help them make the best decisions for them. If you are respectful and respond to their needs, you have an opportunity to forge even stronger relationships and greater loyalty.