Account for Financially Limited Mindsets

When people feel financially poor, their consumer behavior changes. From a thorough review of past studies, researchers at Georgetown University, Texas A&M University, The University of Chicago, and University of Minnesota describe those changes in ways which allow better marketing to the financially limited mindset. The portrayal describes changes in the consumer as they move from reacting to coping to, when necessary, adapting.

• Sometimes, becoming poor happens suddenly, as with losing a job or moving from a neighborhood where an income was sufficient to one where it most assuredly is not. These consumers find themselves reacting to the changes. If financially taxed after a long period of financial security, people become cognitively taxed as well. Reactions range from indecisiveness to aggression. Their self-esteem suffers. Marketers can earn customer loyalty during this stage by assisting customers to establish controls on spending, patiently guiding shoppers through decisions, and giving the people opportunities to talk about their frustrations. 
• As financial constraints continue, most people learn to cope. They use available resources more efficiently, such as finding creative uses for products before discarding them. Where they previously took a longer time to make decisions because of uncertainty, they now take longer because they’re spending time savoring experiences, anticipating planned purchases with pleasure, and weighing, for each purchase, what would be gained against what’s lost with foregone alternatives. In independently-oriented cultures like the U.S., the coping stage often includes striving for status, with the result that precious funds are spent on scarce products and small luxury items. 
• For some people, poverty becomes a lasting way of life. Plus, there are those born into poverty. For these situations, consumer behaviors are a matter of adapting rather than reacting or coping. There is more of a focus on the short-term than on the long-term so a greater attraction to what feels good and what’s easiest to start using. Because those who are chronically poor feel disenfranchised in society, the reactions could include depression. But the researchers find that for others, there are ways in which people adapting to financial limitations demonstrate better consumer behaviors than do others. They evaluate promotional discount offers more carefully. They become innovative and more interested in developing mutually beneficial interactions. If they can’t afford a desired item, they proceed to question its value to them. Marketers interested in fully serving the bottom of the financial pyramid will acknowledge these distinctive characteristics. 

Successfully influence the most prosperous & most loyal consumer age group. For the specific strategies & tactics you need, click here.

Click for more…

Update Keeping Up with the Joneses
Nurture Healthy Retailing Using Human Nature
Support Consumer Collectives for the Poor
Enrich Customers to Encourage WOM