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Commentary & Analysis

If Price Isn’t the Real Motivator, What Is?

According toForrester Research, price isn’t a dealbreaker for most customers. If price isn’t the deal breaker in a purchase decision, then what is? That’s where data comes in.

By Heidi Tolliver-Walker
Published: January 31, 2019

If only 17% of shoppers say price is a dealbreaker, according to Forrester Research, then why do 76% of retailers aim to sell goods at the lowest price? This is a good question, and it’s one your customers should be asking when they put together their marketing campaigns.

Of course, customers still want to feel like they are getting a deal. (According to Statista, 93% of consumers use coupons or discounts at some point during the year.) It’s just that other factors are becoming as or more important than price. For example, a survey from NRF found that 75% of customers expect free delivery of online orders up to $50. It also found that customers are looking for things like hassle-free shopping and increased convenience, such as online shopping with pick-up of all items, prepaid, at the store.

So it’s not that price isn’t important. It’s that getting the most value and feeling the most satisfied with the purchase may be more so. After all, notes Lori Wagoner, community manager of Inbound Junction, “Consumers aren’t price-conscious when it comes to spending on the goods and services that they really want. This is apparent from the way we max out our credit cards or sell our kidneys to buy gadgets or shoes.”

This is where data plays an increasingly important role, and why investment in data analysis, customer profiling, and development of personas is so critical. We need to understand the real triggers for purchasing decisions.

  • Are people buying because they have a need?
  • Are they buying because other people are buying?
  • Is it a spontaneous purchase because, in the moment, they just feeling like doing it?
  • Are they driven by social, cultural, or other factors?

While we cannot predict every buying behavior, data can give brands amazing insight into who, when, and why customers buy. Take just the nonprofit sector. Did you know that Mac users give more to charity than PC users? (According to QGive, Mac users give an average of $182 per donation, while PC users give an average of $137 per donation.) Or that households earning less than $25,000 per year donate the largest share (16.6%) of their income to charity?

All of this adds up to one thing: data. It is increasingly clear that marketers can’t leave the mail house or email delivery server without it. The more we understand about consumer behavior, the more we understand that price is not always the greatest motivator, and it’s not necessarily even the most important one. Identifying the right buying triggers for each audience is going to take data—lots of data—and the willingness to figure out how to apply it. 

Heidi Tolliver-Walker Heidi is an industry analyst specializing in digital, one-to-one, personalized URL, and Web-to-print applications. Her Marketer’s Primer Series, availalbe through Digital Printing Reports, includes “Digital Printing: Transforming Business and Marketing Models,” 1:1 (Personalized) Printing: Boosting Profits Through Relevance,” “Personalized URLs: Beyond the Hype,” and “Web-to-Print: Transforming Document Management and Marketing.”

 

Discussion

By Eddy Hagen on Jan 31, 2019

Interesting! And true: understanding consumer behavior is important.

And since you didn't explicitly say it: dear printer, translate this to your business. Why do your customers come to you instead of going to your competitor? Did you ever ask them that? Is it price? (what a lot of people think) Or is it something else? Is it something you can reinforce? If you can: you should!

There is one fact that seemed a bit strange to me: households earning less than 25000 US $ spend 16,6% of their income on charity??? That's up to 4150 US$... That's a lot. I consulted the link you gave and their sources and this is not correct. The figure 16,6% seems to come from the Chronicle of Philanthropy and reflects the *change in share of income* given to charity, from 2006 to 2012. Which is very different. And that makes more sense: during that period, poor people increased their charity donations, while those above 100.000 US $ income decreased their charity donations. (more: http://www.nptechforgood.com/2015/01/25/15-must-know-fundraising-and-social-media-stats/ - statistic number 7)

 

By Heidi Tolliver-Walker on Feb 01, 2019

Thanks, Eddy, for taking the time to dig into that. I suppose it was an odd number, but I guess me not thinking too much of it comes from my background in rural Appalachia — where the poorer you were, the more likely you were to give your shirt to someone else. But glad to have the comment corrected.

 

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