Shoppers are skittish during this recession, there’s no doubt. With the loss of wealth in their 401K’s, the loss of equity in their homes, and their employment at risk any second, many consumers have tightened their spending habits and adopted a new frugal outlook. Many experts believe that these habits may even outlast the recession, as customers begin to adopt a leaner and meaner lifestyle. This is not good news for business owners and if they do not adapt their offerings to this new frugal customer, they will see a trickle downward of sales as consumers opt for businesses that appeal to them more.

Changing Your Strategy, Keeping Your Business

One of the main things to keep in mind is that the average consumer has less disposable cash and little credit. They may opt to buy more of items that are less expensive and reserve their big cash purchases for when they feel more secure about the economy. That’s why candy and lipstick are hot sellers during a recession. They offer a large sense of gratification to the consumer who spends relatively little to obtain that product. In the same vein, you should promote your lower priced products more than your higher priced ones at this time, creating more small opportunities for purchases, rather than trying to bank on one large purchase.

Another way to take the loss of cash or credit in the economy into account is to offer payment plans that give the consumer a way to pay a little at a time for a larger purchase. We are now seeing the resurgence of layaway programs in some popular stores, and they make a great deal of sense of a cash-strapped consumer.

Creating A Perception Of Value

Frugal customers aren’t just about paying less, they are about buying items that have a large value in comparison to cost. If your inventory has a number of large ticket items, the way to sell those to a frugal customer will be to accentuate the value versus the price. Value is very subjective and can be manipulated through clever advertising. Some customers find value in education, others find it in quantity. Understand what your customers value about your products and services and what makes your product better than your competition’s. Then, instead of lowering a price or offering a cheaper product, make sure that your customers see the same value you do in your products and services.

A high quality product that has a long life, returns something on the investment, or improves the potential to create income in a person’s life is something that is of high value right now. People want their money to buy quality products that they do not have to maintain or replace frequently and that offer some genuine payback for the purchase. Sometimes you can sell value through specific programs that reduce the costs of maintenance or repairs, like leasing. If your customer sees a high value in that, they will be willing to pay to have that option. Other times, you might have a customer that sees more value in ownership, to retain an asset for a longer life, then that’s what will sell your product to that customer. The key is offering many different options to buy that will appeal to the many different types of frugal customers and their buying habits.