Have you ever shopped for groceries only to find that everything is more expensive than you expected? Or, have you ever been in a restaurant and been shocked by how expensive everything is? Or, have you ever checked out of a hotel and found out that the checkout girl did not give you the correct change?
If so, then you know how important it can be to understand the concept of cost-awareness in marketing. So, let’s take a closer look at how this critical marketing concept can be incorporated into your next marketing strategy.
Why Are Customers Aware Of Costs?
Customers are increasingly more aware of costs because they’re focused on prices more than ever before. According to HubSpot Blogs research, customers are now more likely to compare prices before purchasing a product (42% vs. 39% in 2015).
What’s more, customers are increasingly looking for the best value they can get (37% vs. 35% in 2015). That being said, knowing how much something costs is only part of the battle. You also need to be aware of how much you’re spending so you can get the best value for your money’s sake.
The key is to find a way to connect the cost of a product or service to the value you get for that money. Fortunately, there are four proven ways to do this.
1. Use Relative Values
One of the simplest yet most effective ways of creating awareness of costs is to use prices that are relative to something else. For example, if you’re selling a bottle of wine for $40, but the bottle next to it is only $20, then the customer will automatically think that the $20 bottle is a great deal. It is a wonderful way to make consumers feel like they’re getting a great deal even when the product or service is more expensive than usual. You can also use this technique when displaying your competitors’ products or services. By comparing them to something more expensive (i.e. your product or service), you’ll make the consumer realize that what they’re buying isn’t as good as what you’re offering.
2. Use Pro-Consumer Tactics
You can also try using pro-consumer tactics to make products more affordable for your customers. If a company’s goal is to make a profit from the sale of a product, it can become a bit pricey. However, if the goal is to make the product as affordable as possible for their customers, then they’ll most likely be able to drop the price a bit. This technique can be used to great effect when selling affordable housing – if their goal is to make as much profit as possible from the sale of a house, they might be able to convince a customer to buy it even though it’s more expensive than what they paid for average housing. The key is to find the right combination of tactics that will make your product or service more affordable for your target audience. This way, you’ll be able to connect the cost of a product or service to its value, and ensure that the consumer feels good about buying your product or service.
3. Use Tax-Free Tricks
You can use any number of tax-free tricks when it comes to marketing. One of the simplest (yet, effective) ways of connecting the cost of a product or service to its value is to incorporate tax-free savings into your marketing strategy. Essentially, when a tax-free savings account (TFSA) is coupled with a debit card, then you’re connecting the cost of the product to the value it provides. For example, suppose you’re selling a house and you want to incorporate the cost of moving into that house into your marketing strategy. Instead of listing the cost of moving as part of the price of the house, you could instead list the cost of moving in terms of how much money you’ll save by not having to pay income taxes on that money. After all, if you can get a TFSA debit card then you won’t have to worry about paying taxes on your money when you buy things with it. With a little bit of creativity you can find ways to connect the cost of your product or service to its value, and use the savings you’ll make from that purchase to fund your next marketing campaign.
4. Establish A Sense Of Urgency
Embrace the fear of missing out (FOMO) when using social media. When someone posts about an event, record or product that your audience might be interested in, you can use this as an opportunity to promote your own product or service. For example, suppose you’re an e-commerce store owner who wants to incorporate the cost of shipping into the price of your product so the customer feels like they’re getting a good deal. Instead of having the price for sneakers state that they cost $100 to ship, you can change the price to $125 to include shipping. If the customer fears that they won’t be able to get the product they want if they don’t act quickly, then this is a great way to generate interest. You can accomplish the same thing by establishing a sense of urgency via email marketing or social media ads. When you create a sense of urgency around a purchase, even if the end product is more expensive than usual, the consumer will not feel cheated because they feel like they have to have it now before the product is gone (or the price goes up).
By connecting the cost of a product or service to its value, via one of the four methods mentioned above, you’ll be able to create a more realistic picture of what exactly you’re paying for. By doing this, you’ll be able to make sure that the consumer feels good about making the purchase (even if it’s more expensive than usual). More importantly, through the use of marketing analytics, you’ll be able to track the effectiveness of your marketing efforts, and adjust your strategy as needed.