How to Deal With Cheap Customers?

People into businesses know that whether you are selling a product or service, there will always be customers who will love what you’re offering and still say your price is high.

With the time uncertainties and shifting demographics on the market affecting the current economic climate, it’s understandable that most people are looking to save more money.

Just like some individuals are open to spending more for a product or service of their taste, some disregard certain factors and believe the only way to achieve value is to pay less.

Here, we define ‘cheap customers’ as those that feel more buying pain than others. Not that they are poor, they are just afraid to spend money and can even feel it’s okay to sacrifice value and quality at the expense of saving money.

As a business person, seeing them as ‘cheap’ is not the best way to go about this. You only need to find the best strategies towards reframing and readdress the issue instead of sacrificing the customer.

Imagine presenting your sales pitch, your customer is smiling, everything is going great, and you’re ready to lock down this deal. Just as you hand over the contract before you close the sales, they start showing reluctance to part with their money. What do you about customers like this? Do you drop your price or walk away?


Types of Customers based on Paying Habits:

According to Neuroscientists, people have the habit of spending until it hurts.

When it comes to spending habits, there are three types of customers;

  • Tightwads
  • Conservative spenders
  • Spendthrifts.

Tightwads are the people who prefer to spend less than they ideally should, and they make up 24% of the average customer base. With 15% of the average customer base, the spendthrifts are opposite; they prefer to overspend. And somewhere in between are the conservative spenders with 61% of the average customer base.

Tightwad customers feel more buying pain and find it harder to part with their money. Not that they always have to chase the least priced things, they just cannot see the values of products or services at full prices. Addressing the issues around cheap customers the typical way might affect your other customers.

How to differentiate between cheap and frugal customers?

At least once, many of us have come across those bargain hunters that are always ready to carve us the lowest possible price they can get. As exhausting as it seems, you need not let yourself be bullied by the price reduction tactics they always apply. Chances are they are cheap customers, and they want something at your expense.

There are frugal customers, and there are cheap ones. By accessing your transaction situation, you can quickly tell their differences and avoid getting sucked in price wars.

The similarity between the cheap and frugal people is that both of them love to save money. However, the cheap customers do not mind doing so at the expense of others.

For anyone in a sales role to deliver value in a business, it helps to be cautious with how you proceed with customers whose focus is on saving money. The first step is by identifying the differences between cheap and frugal customers

How to Identify Cheap Customers?

  • Their only focus is spending less
  • These people are often afraid to spend money
  • The price is most times the bottom line
  • They are ready to sacrifice value, time, and quality to cash in on every possible short-term saving regardless of the cost.

How to Identify Frugal Customers?

  • They prioritize spending to focus on the things they care about
  • These customers have a bigger picture in mind and utilize patience as a strategy to cash in
  • Value is the bottom line of frugal customers
  • They focus on maximizing total value and consider time as an essential factor in transactions.

One look at the differences and characters of cheap and frugal customers, you realize that working with thrifty customers is advantageous to you and your business. You get to save more money and time. However, all hope is not lost for cheap customers. There are ways to deal with these people and minimize their buying pain without losing your customers.

How to ease the buying pain of Cheap Customers

It’s not that offering discounts or occasional deals are necessarily bad, but when customers consistently want what you are offering for cheaper than your asking price, leading your business to a thriving stage becomes difficult.

If you have more cheap customers than you wish or have current customers you fear may employ this tactic down the road, there are a few things to keep in mind when trying to ease their buying pain.

Expand the product offerings

In transactions, time and money are dear to all customers, especially the conservative spenders. Tightwads care little about the service and product compared to the money they pay. Since their focus is mainly on the price point and length of time, you can rationalize their prices as key to convince them. This way, you break up a huge-looking price into smaller bits that seem more affordable without lowering the price.

When the customer says your product or service is too expensive, you can respond by adjusting your offerings to a lower-value version of your product.

Instead of offering $1000 per year for a continually used service or product, you break the pricing up into segments. Proposing $84 a month or even $2.75 per day may feel like a more favorable deal to this customer type. In the end, you get them to pay the same value, only that they’re paying less in the short run.

Saying “the product worth a little more than two bucks a day” is easier to stomach for customers than placing the value at $1000 per year. With this, the customer stops thinking you’re going to budge, and you don’t have to go low in negotiations.

Let the customer win on something other than the price

You would prefer that your customer’s conversation doesn’t become a bargaining war, so let them see the win on other things other than the price. The first step is to agree instead of defending. You can say, “you are right. The product is quite expensive”, then redirect your sales terms towards how your offerings are profitable to them instead of focusing on the price.

You can even slip in little attractions like, “how about we give you a free tutorial on how to get the most out of our product.” With this, the customer will feel accomplished as he has won. Then you change the conversation into something you can negotiate on. By demonstrating your value and showing your product’s effectiveness and efficiency, you can feel free to stand on your ground on pricing.

Offer bundle products

Generally, customers dislike buying multiple things in bits when they can complete the purchase at once. There’s an opportunity here for you as a seller. When customers intend to buy a car, they prefer to opt for packages that feature the vehicles’ entire accessories instead of buying them in units.

Only a few people can endure having to buy the vehicle separately from the digital navigation, leather seats, or upgraded sound system. Most buyers would what all these small related products together and force specific decisions for this transaction as an upgraded vehicle.

Combined packages with unique discount opportunities, like a digital camera with an additional tripod stand, can ease the customer’s buying pain to one transaction and profit you as a seller. This way, you make your customers happy with good deals.

Make small changes to your transaction language

For conservative spenders, it’s the minor changes that matter most times. A small change here and there in the language can affect your customer’s reaction and be all you need to make the difference. Research shows that regardless of how small the figure is, using “small” or “only” right before the product can psychologically influence a tightwad customer’s receptiveness to make purchases.

For instance, instead of writing “$5 fee” as the shipping charge for the product, you are offering, writing “a small $5 fee” can make the difference. All that matters here is the customer’s perception. It would be best to change your language by adding simple words that remind the cheap customers that these charges are small and win them.

Marketing in terms of utility over pleasure

Even when you are selling a luxury product, focus more on practically offering the product. While selling a luxury bed, focus on how it can keep back pain in control.

Customers who are unwilling to path with their money would care less about the relaxation or luxury, but you can buy their attention when your sales emphasize the utility. Also, it’s not that hedonic terms don’t influence the sales positively to some other categories or buyers. However, when dealing with tightwad ones, using a utilitarian way serves as a plan B selling strategy and changes your selling tone.

Agree before you defend

Going lower than your price will not pay your business. One last technique you can use to land the deal and defend your price is to agree with the client before protecting the product’s value or service.

Using responses like “most of our customers say we’re quite expensive before they buy,” “true, the price is high, but our services are exceptional,” or “you deserve only the best” can go a long way to helping your deal.

After replies like this, you can tell them what your business has that the competitors lack and what makes your business a better choice before defending the price. This helps them justify your price.

Also, people feel less bothered about spending money when they see that others are doing it. Letting them know that they are not the only ones who think the price is high, but they are the only ones not buying, pushes the tightwad customers to commit to your deal.

Give relative compliment when you get the opportunity to tell them how better their business will be if they opt for your product or service. Let them see how much of a problem the few extra bucks they’re paying you to solve for them.

Sometimes they’re not the right customers for you, and that’s okay

Customers are labeled “cheap” based on their spending habits. Sometimes not pushing such people to purchase your product is another way of handing them. Although there is an emphasis on putting the customers first to grow your business, you also need to know the bottom line you would not go beyond and be prepared to walk away from the deal.

Our customer-loving self is a bit affected by saying this, but in the end, not everyone will be interested in your services or products. You can only put enough effort into dealing with some customers before realizing they do not fit appropriately in your branding positioning. There’s no wrong in positioning your business to favor certain customers over others directly.

It might seem strange to avoid any customer, but the truth is that always walking from these deals does both you and the customer a favor. By staying away from customers that aren’t interested in your product or service, you get time to focus on the other ones that genuinely love your offerings and avoid the additional drag cheap customers can cause.

When you have made several trials, and these people don’t still want to pay your correct worth, it’s not always a reflection of your business. Maybe they do not require your product or service at that time. Don’t be scared! Don’t go berserk! It’s nothing personal. You just need to be ready to get rid of them politely.

In businesses, not everyone is compatible with each other, and it’s wise to detach the weak link with some cheap customers. Define your services and your ideal customers, and clearly outline the ones that aren’t suitable for your business. In the long run, it would profit everyone.

You can get several rejections, but what you can do is ask for referrals before ending your conversation and let them know how to contact you in the future. This helps your business keep finding new customers to make up for the lost ones.

Jeannie Brouts

by Jeannie Brouts

Jeannie Brouts is a Marketing Manager at SEO Vendor. She has 10 years of experience in White Label SEO and online marketing. Jeannie loves writing about the latest ways to help businesses market and produce results.