Daily Tips

Capitalize on the Frugal Mindset

5 ways to build stronger relationships with customers in an uncertain economy

November 18, 2008
Edited by: Ken Beaulieu in: Customer Relationship Marketing

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It’s not news that customers aren’t spending. Rattled and battered by continuing economic uncertainty, they are being more careful and more cautious in their decision-making. In every category, from savings and investments to major purchases, from discretionary spending to household necessities, from preventive health care to elective surgery, they are looking for reasons to put off buying, and demanding more value when they do buy. Here are five key tips for appealing to the frugal mind-set to help with your customer relationship management efforts:


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  1. 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.
  1. 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.
  1. Help your customers evaluate alternatives — including doing nothing. Provide tools and information to help people calculate costs and benefits and make choices. Stress the cost of not acting — show your customers what they lose if they don’t fund their IRA or visit their doctor.
  1. 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 reduce maintenance, improve health, or lower energy costs? When people are being cautious, their horizons get shorter. If you can, show your customers that they will see quick returns. If your product costs more, does it also come with better service or more features? Will they get better results?
  1. 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 tradeoffs, 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.

— Barbara Sullivan, managing partner, Sullivan & Company (sullivannyc.com)

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