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A survey of more than 13,000 individuals conducted by Carnegie Mellon University reveals there are three types of buyers:
Each of these types responds differently to different marketing messages. So, how can you identify which is which, and how do you sell to them?
Tightwads tend to feel pain associated with buying; they tend to avoid spending money even in situations where most individuals would find the expense to be justified and of good value. Tightwads are differentiated from ‘frugal’ people, as frugal people don’t tend to feel pain at buying, they just enjoy saving more. Tightwads tend to carry little credit card debt and have more money in personal savings accounts than the “average” or “spendthrift” buyers.
To sell to tightwads, you want to minimize their buying pain. One way to do this is to appeal to the utilitarian or practical aspect of the purchase. For instance, if they need a pick-up, don’t try to sell them the luxury model; to a tightwad, paying extra for luxury features is unnecessary. Another way to minimize their buying pain is to watch how you use language: avoid saying things like “immediate payment in full,” or a “fee of $100.” Instead, say things like, “small down payment,” or “only a $100 fee.” Also, tightwads don’t like per-item pricing; bundling features together in package pricing works better.
Spendthrifts are three times as likely as tightwads to have credit card debt, and they are likely to have less in savings. This means that right up front, although they are willing to buy, financing will be more of an issue. Spendthrifts tend to derive great pleasure from buying; these are the types that respond to the “luxury” pitch, or the emotional satisfaction of immediately driving off the lot with a new car (unlike tightwads that don’t respond to that type of sales pitch). Spendthrifts want instant gratification.
“Average” buyers fall somewhere in the middle and are susceptible to both types of marketing messages and pitches.
Identifying what type of buyer is in front of you can be accomplished with casual conversation; ask a consumer about past purchases, and what they did or didn’t like about cars they have previously owned. Tailoring your marketing messages to different types of buyers can help boost sales and customer retention, especially to the 24% of the market identified as “tightwads” – but please don’t use that term in front of your customer!
Do you segment your customers into buying “types”? What have you found to be effective for selling to tightwads, spendthrifts and “average” folks?