Give Low Income Customers Dignity

In their 2002 paper, "The Fortune at the Bottom of the Pyramid",  researchers at University of Michigan and University of North Carolina argued that because there are so many poor people in the world, they are a lucrative market for retailers, even if each person spends only a very little.      Your customer base may not be as poor as those addressed by the BoP initiatives. But chances are, many of your customers are feeling the pain of limited income for now. Help these customers maintain their dignity as they make challenging purchase choices. The economy will almost certainly turn more positive in the future. We want to cultivate the gratitude of these customers.

      Based on the BoP line of thinking and more recent studies at University of Strathclyde in Scotland, here are a few tips for helping low-income customers maintain their dignity:

• Offer smaller package sizes. I recommend against abandoning your largest package sizes, though. Low income customers usually realize they'll get better value from those, and it helps their spirits to think about purchasing the larger sizes in the future.
• Carry low cost healthy merchandise for children. The research says that one of the greatest difficulties for low income consumers is denying the requests of their children. Among the items you carry should be ones that parents can feel good about buying and that the children will appreciate, even if the items aren't the children's favorites.
• Consider expanding credit terms and layaway plans. Although some experts say the BoP point of view is overly optimistic, most agree that low income customers are usually very good credit risks if they are treated with dignity.
• When family members shop together in your store, allow them privacy to discuss purchase decisions on the sales floor and, if you detect hesitation, at the cash/wrap.