Moving Customers Away from Price Sensitivity

“We’re a price-sensitive market. For leisure travellers, there’s some inclination to postpone travel when prices are high. Some business travellers may instead do a conference call.” – Wayne Shank

While customer service may top the list for customers as a reason to stay with a company, price is certainly not far behind. Companies too, in their efforts to increase their customer base, use pricing as one of the ‘tactics’ to entice customers and defeat competition.  However, pricing can soon turn into a self-defeating war and would be counterintuitive to growth and profitability.  True, customers have far more choices than they ever did and this is probably why they are in a position of power to demand certain product quality and at ‘price points’ that they deem appropriate. Companies cannot comply if they are to remain in business and hence need to move customers away from price sensitivity from the earliest stages of the association.

The need to move customers away from price sensitivity has become more pronounced since regular price cuts not only eat away at profit margins, but also impair brand value. Going too low on prices, plunges customer expectations and ironically they would tend to believe that at low prices a company could not provide quality. This in turn leads to disengagement and moving on to other market players. There is no easy answer and this is not a problem limited to any industry or set of companies. It is imperative therefore, for companies to steer customer attention away from pricing and move them to other features and value. It would take a major shift in the way companies approach their business and the relationships with their customers. Those companies that are able to customers to focus on their innovative products and creative services, coupled with top class customer service, would be successful at moving customers away from price sensitivity.

At all times a company should be able to provide answers proactively to the possible customer question of ‘what’s in it for me?’ or ‘what do I gain from the association?’ Consistently showing and providing value to customers would keep them from focusing on price and other ‘options’ in the market. Top class service would let them know that the company is committed to providing them the best and at prices that match the quality of the offerings. It may not be easy to get customers to listen to any company all the time, especially given the overcrowded market, unless the company grabs their attention through something noteworthy. This is a winning method of moving customers away from price sensitivity and focusing on what the company is truly great at doing.

The fact is that if customers get fixated on prices, it would be tough to veer their attention away unless a company can do something so surprising and noticeable that customers have no option but ‘to look away from prices’. It is important to give them something truly outstanding in terms of quality, the ability to satisfy their emotional needs, and something that they would see as relevant both for their business and personally. Pricing should be the last tactic to keep them with your company.  However, before expecting customers to move customers away from price sensitivity, it is important that a company first is able to do a whole lot to bring and keep the focus on the value of its offerings, show customers its USP, and amplify how it differentiates them from the ‘run of the mill’ companies in the market.

It would be a smart move to put a pricing structure in place, which allows customers to choose products based, on the value and the price. The same product could have gradations in terms of how long they can last, the extra value each level of product can deliver, and so forth – doing so clearly shows customers what they can get and why they need to pay a certain price for each individual ‘gradation’.  This is a great way of highlighting the advantages of a product, showing the company’s focus on making improvements, and giving customers a new method of comparison. Rather than comparing products with competitors, whose products may not have these gradations – customers would get a wide range of choices in the same product within a company. Hence, while customers stand to gain by picking options based on their needs and budget, a company would be smartly moving customers away from price sensitivity by showing them a value proposition with each gradation of a single product.

The foundation of smart customer service and selling strategies is to show customers value in the relationship and the products, without waiting for them to ask. If they need to ask – a company is doing something wrong and exposing itself to the risk of making customers think of its competitors. Remove the barriers to their entry into your company and increase the reasons for why they would not find anyone better both in terms of range of products, quality, and the pricing. Show customers your authority and expertise and how your company would use these to meet their business goals and achieve success for them.

Rattling off or focusing too much on product / service features, is not a good idea. Features can be exceeded at any time by any competitor since they are exhaustive. What is a great idea is to show how the features (even if fewer than competitor products) would bring more benefit to the customers. Show them the number of problems that can be removed by using the company’s offerings and how the products would make their lives simpler. This is a more effective and potent way to move customers away from price sensitivity and keep them with your company for longer. Customers are short of time and have low attention spans – it is necessary therefore, to grab their attention swiftly and then keep doing so consistently over the entire span of their ‘journey’.  Keep the reasons for using your company and its products, simple yet forceful enough – ensuring that they forget about any possible ‘alternatives’ that currently exist or may come up in the future.

Companies however, in their endeavour to move customers away from price sensitivity, could make the mistake of believing that every lead is worth going after or pitching to. A careful analysis of which prospects would make good customers – that is, they truly need your offerings, would be interested in staying with your company long-term and would remain profitable. When pitching to prospects, ensure that your company understands their needs and pain areas thoroughly in order to show them how your company can help now and in the long haul. The ‘pitch’ must have a list of achievements of your company, a narration of how many customers your company has helped in the past and currently, and what additional value you can bring to them now. Putting these points across effectively, from the start, will ensure that your new potential customer is a lot more flexible on the pricing, and would be willing to pay for value than for a ‘commodity’.

To move customers away from price sensitivity build your brand’s image as one that shows that is ‘the solution’. This increases its recall value, makes it memorable and more easily trustworthy – it would be a lot easier to convince customers on the price when they see value and benefits upfront.  When you get a new customer, delight them with exceptional customer service consistently. Not only will they become less sensitive to pricing, they would also become loyal brand ambassadors and pull their weight to gain more business and success for your company.

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