There are a lot of political pundits who believe the election came down to the economy this year. And while we’re not looking to start any disagreements about whether it went the way it should’ve or not, we can’t discount the importance of the financial strain in the country and its impact on holiday shopping. That’s why this year, you need to address the elephant in the room and appeal to the budget-conscious consumer. However, getting into a price war isn’t the answer either. You don’t want to cut away your own profit margins. Selling more and making less is not the way to go.
Appealing to the Budget-oriented Customer
Here are some effective approaches to help you appeal to cost-conscious consumers and still bring in revenue:
1. Ace Competitive Pricing and Promotions
Offering competitive prices and special promotions is crucial to attract budget-conscious consumers. You can do this by:
o Providing a range of products or menu items at different price points to cater to various budgets.
o Introducing early holiday deals for shoppers who start their holiday buying early. Sometimes your competition is not the business down the street but inaction. No one wants to buy when they think a better offer is coming. That’s why so many businesses are offering pre-Black Friday discounts and labeling them as such.
o Creating loyalty programs, introducing punch cards, or providing discount coupons for shopping now that they can use later will encourage customers to return.
o Matching or beating prices from previous years to make holiday goods more affordable. Try a loss leader on one item to bring people in your store. A fun marketing campaign could be “Shopping like it’s 1999” and offering one item at its 1999 price or for $19.99.
o Creating a value menu. Most shoppers want a great deal, but they hate to do math. Take a tip from fast food restaurants and create a value menu. People assume the value menu is a great deal because it’s marketed that way. If you don’t run a restaurant, create a “value bundle” or a “best value” tag for certain products or services. Cost-conscious shoppers will be drawn to them.
o Providing discounts for large spends and free shipping. Many shoppers want to get holiday shopping over with. Encouraging them to spend more with you and knock out their list with you can be a powerful marketing driver. At checkout ask, “Who else do you have left on your list?” Then suggest an item in store that might fit what they’re looking for. If you offer online shopping, provide free shipping for a set dollar spend. People will often spend more on products to avoid paying for shipping.
2. Value-Added Services
Enhance the shopping or dining experience with additional services that provide value:
o Offer convenience features like easy returns, extended hours, or gift-wrapping services.
o For restaurants, provide recipes or complete dinner menus that meet specific price points. Examples include the $5 menu or pick two for $30.
o Implement order-ahead and in-store pickup options to make shopping more convenient. Take a hint from a past promotion of Little Caesars pizza where they always had pepperoni pizzas ready to grab and go between set hours.
o Think about a harried parent and what they might need this time of year. You may be able to offer a new service or product for the holiday season only. For instance, you might offer pizza by the slice (when you usually sell only whole pies) or some little grab-and-go goody at a discount price to keep hungry kids happy while their parents shop. Some supermarkets give a free cookie to every child whose parents come to the bakery. Yes, there’s a cost to providing a free cookie, but a parent being able to shop in peace means they’ll select your store knowing their child will be content as they shop. This could increase spend too.
3. Strategic Marketing
Use targeted marketing techniques to reach budget-conscious consumers:
o Employ urgency and scarcity in your messaging (e.g., “Last Chance,” “Limited Stock”) to drive immediate action. Fear of missing out is a powerful motivator.
o Highlight the convenience and cost-effectiveness of shopping locally for last-minute needs. Talk about how local businesses can provide a helpful shopping experience and are excellent at making gift suggestions.
4. Budget-Friendly Options
Develop product or menu offerings specifically designed for cost-conscious customers without impacting your bottom line.
o Introduce smaller versions of popular items or sample packs at lower price points.
o For restaurants, create special fixed-price holiday menus or family-style options. Market that it’s not “cheating” at a potluck if you bring a delicious item everyone loves and then plug your family-sized menu items.
o Offer gift cards with bonus incentives (e.g., $5 off a $100 gift card) to encourage higher spending.
5. Emphasize Value and Quality
Communicate the value proposition of your products or services:
o Highlight the quality and uniqueness of your offerings compared to mass-market alternatives.
o Emphasize the benefits of supporting local businesses during the holiday season.
o Tell the story of your product, service or business. Antique stores, for instance, often use tags to explain what an item does, where it’s from, and how it’s valuable. A story can transform an ordinary item into something extraordinary.
o Create a “Be like ___” campaign. Ever notice how pictures on a menu influence buying decisions? If you offer a service where images help decision-making (beauty providers and tattoo artists, looking at you), post images on the wall of some of your most popular designs. Label them by name like “Mary’s updo” and post a small card with her story. For instance, “Mary wanted to look elegant for her company holiday party. This beautiful chignon looks intricate, but it lasts through the night and into the wee hours with no upkeep and fuss.” This functions like a testimonial but puts a face and name to your design.
Budget-conscious shoppers and diners aren’t always looking for the cheapest price. They want to feel like they’ve gotten the best deal. If you long to increase foot traffic and sales while building customer loyalty during the Small Business Season, don’t make people embarrassed for being cost-conscious. Make them feel welcome.