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How “Price Pain” Affects Buyer Decisions

In marketing, we have two “pains:” pain points and price pain.

Pain Points

One of the reasons why some agents are more successful than others 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 concern. Knowing their pain points allows you to offer them meaningful solutions to their issues through the services and destinations you recommend.

Price Pain

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 parted with the deposit.

We can see the effect of price pain on the faces of your clients once you tell them what their trip will cost. This means the client goes through all of the steps involved in making a decision only to balk at the last hurdle and decide to postpone their trip.

There are several reasons for changing one’s mind, but the most common is what is termed “sticker shock.” That is, 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 and other fees, which often make the “vacation” they were hunting for look like much less of a good deal.

Buyer’s Remorse

We can also easily see the effect of buyer’s remorse. Some people will regret the purchase so much, simply by virtue of having spent the money that they will ask for a refund. It might have nothing to do with the quality of your service or the destination at all, but rather their state of mind – that of simply finding it too painful to “indulge.”

This is why letting them know that they have time to think it over and cancel if necessary can be a great way to win over the tightwads. This makes it appear that it is risk free to do business with you, and rightfully so. It also makes it easy to deal with refund requests because you don’t have to argue about the reasons for the refund.

Price Pain – a la Carte versus Buffet/Meal Deal

You can also address price pain by offering a “buffet” or “one price for everything” deal rather than a per-item price.  This is often known as bundling or packaging and makes it more difficult to compare prices with a competitor.

A simple example of this is 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.
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Don’t nickel and dime your customers. Put together a great vacation package for one fair price. Be prepared to include the cost of the taxes (if any) and port charges if appropriate into your one all-inclusive price.

Price versus Need and Value

The price pain will vary depending on how much the person has their mind set on this particular trip.  For example, a tightwad person might not be happy about the helicopter trip to the glaciers, but they know this would be a once in a lifetime opportunity. Then it becomes a case of perceived value. Which tour makes the most sense given the current set of circumstances.

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, include a coffee table book with photos taken on vacation. This will boost the value even though it will cost you little to create these extras. (Other than time.)

Understand pain point and price pain, and your marketing messages will speak to the needs of even the most tight-fisted shopper.


Mike Marchev Mike Marchev has plenty of stories, strategies and tactics to keep you on top of your game. Ask to be placed on the distribution list to receive his periodic Motivational Memo. Click Here to Join Now.
For information on Mike’s 6-Week Online Selling Course, email Mike at mike@mikemarchev.com with the words “sales course” in the subject box.

 

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