Research indicates that when someone buys something and thus depletes their financial resources, they will be less satisfied with the purchase. In other words, the greater the pain of spending, the lower the satisfaction with the purchase.
Robin Soster, assistant professor in the Department of Marketing at Walton College of Business, University of Arkansas, and her co-authors, found that a consumer’s satisfaction with a product or other purchase is decreased as their budget is depleted.
Research Frontiers, reporting on the study, summed up her research findings: “Participants whose purchases depleted their financial resources reported lower satisfaction with a movie download compared to those who purchased the same movie with plenty of money remaining in their budget.” Concluding that, “satisfaction was based on the financial situation, not the purchase.”
This dissatisfaction if further affected if the purchaser believes that it will be hard to replenish the money or that replenishment is a long way off.
Based on her findings, Soster suggests that marketers pay attention to when they time their offers. For example, after they receive a pay check or tax refund check, rather than at times in the month when money might be tight, such as when rent is due.
How does this research affect you?
In the coaching industry, it is a common practice to shame people into investing in a coaching program or event. However, this research suggests that this practice could very well increase customer service issues and requests for refunds. So how can you avoid this? Here are some ideas:
1. When a prospect says they can’t afford your product or service, find out if this is just an excuse or they really are feeling the pinch. Ask them, “If money were no object, would you invest?” If the prospect was just saying they didn’t have the money just to avoid hurting your feelings, this question will get to the real answer. Encouraging your prospect to be honest and authentic and honoring their truth when they do will leave a strong, positive impression that may either turn the sale around or have them come back when funds aren’t so tight.
2. If it turns out that your prospect really can’t afford your product or service right now, offer to follow up with them later. Ask them if you can re-connect in one to three months to see if things have changed. Let them tell you when to re-connect and honor any requests not to.
3. Time your offers at times of the month that your target market traditionally has more money. This will change with the type of audience you have, so you may have to do some research.
Now it’s your turn:
How will you use this information to improve your sales and customer experience? What other ideas besides the ones outlined here do you have to apply these research results to your business? Please share your comments, ideas and sage wisdom in a comment below.