Although there’s a cautious sense of optimism these days, Americans still have their minds on their money, according to three recent polls, which found that financial issues are still the number-one worry keeping both consumers and small-business owners awake at night.January's Gallup poll asked consumers what issues were most likely to negatively affect the family finances. Energy costs, food costs, taxes and healthcare costs are hurting the majority of respondents’ financial situations, it found. The issues grabbing the lion’s share of news coverage, such as the debt ceiling and federal taxes, are far less of a concern for Americans day-to-day. Both lower-income and upper-income consumers are struggling, though consumers with incomes of under $24,000 were more likely to cite food costs as the biggest concern, and those with incomes over $90,000 were more likely to cite energy costs and taxes.
Meanwhile, The Conference Board’s Consumer Confidence Index for January found that consumers’ outlook about the economy, and in particular about their personal financial situation, declined sharply. Conference Board economist Lynn Franco cited the payroll tax increase, which took effect in January and cut into American workers’ take-home pay, as a key factor in the decline in confidence.
The same issues are also affecting small-business owners, who in a separate Wells Fargo/Gallup Small Business Index survey cited taxes, energy costs and health costs as having the most detrimental effect on their businesses’ financial situations.
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Given that most Americans are still holding tight to their pocketbooks, what innovations can you make in your products, services and marketing to appeal to these financially cautious customers and prospects? Here are four ideas:
1. Develop new payment options. Help customers make the most of their limited budgets by offering them a wider range of ways to pay. This might include monthly payments; ongoing subscription payments; installment payments; discounts for early payment, for payment in full or for cash payments; or even offering layaway for consumer products.
2. Develop new product and service options. Could lower-end versions of your current products or services attract more of your existing customers or a whole different type of customer? People who think they can’t afford what you currently offer, but would love a lower-cost version, could be an untapped market.
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3. Package your products and services differently. Consider developing “bundles” of products or services at a slightly discounted rate from what the same items would cost if purchased separately. It’s kind of a mind game, but this pricing strategy helps customers feel as if they can justify the extra spending as ultimately saving them money.
4. Innovate around your customers’ concerns. Lower-income consumers have more immediate worries than higher-income consumers, as evidenced by their listing food, energy and healthcare costs as their primary concerns. Develop new marketing messages to customers in the lower-income bracket that focus on short-term benefits such as immediate savings, instant rebates or two-for-one offers. Upper-income consumers and small-business owners are more concerned about longer-term issues, such as taxes. Develop new marketing messages for them that focus on a bigger picture, such as the fact that your product or service offers lasting value or enables them to save for a longer-term goal such as home improvement or building their businesses.
What innovative ways have you found to market to cost-conscious customers and prospects? Tell us in the comments.