Shrinkflation is real! I’ll bet you’ve recently purchased your favorite product, paid more for it and noticed that it was much smaller than you expected. Ultimately you feel duped and that makes you mad. Knowing this, it’s insane to see how many brands are doing it.
What is Shrinkflation?
Shrinkflation is when the product shrinks, but the prices stay the same. Here are just a few examples:
This shrinkflation strategy is a crappy idea! Business executives already have a low trust rating. And when they leave customers feeling duped — it’s not a good thing.
How Your Consumers Feel About Shrinkflation
I wanted to know how consumers felt about Shrinkflation. Did they notice? Did it impact whether or not they switched from one brand to another?
I partnered up with my friends at QuestionPro to find out.
First, I wanted to know if consumers would choose a store brand over a name brand.
Today’s consumers aren’t as brand loyal as I thought they might be. 75% said they would choose a store brand over a name brand. More than half of our respondents had incomes before $50,000 so that tells us that people are somewhat price sensitive but overall, value conscious.
Here, you can see that a majority of consumers are HAPPY to pay more to get the quality they have come to expect.
But then what? What happens when you spend your hard earned money for one level of quality, but get something far less?
A combined 63% of consumers are angry enough to NOT purchase from the company again and 19% actually think the company is cheating them!
If you haven’t realized it yet — while reducing quantity and quality while increasing price might seem like a good idea on a spreadsheet. You stand to LOSE more than half of your customers to shrinkflation!
How to Use Shrinkflation to Get More Customers
Want to make customers happy, make more money and stand out from the competition? Give your customers CHOICES.
Let the big brands focus on spreadsheets and piss off their customers. They can do that because they are ALL doing it and that means that your customers don’t have a choice to actually get what they want — at any price.
Embrace shrinkflation and promote it
The thing that makes shrinkflation so frustrating is that it appears to be “sneaky”. It’s like the brands sneak in this smaller or lower quality package pretending that it’s what you purchased before,
Instead of pretending that it’s the same, EMBRACE shrinkflation! No one begrudges you for being and staying profitable. The issue is the impression of being underhanded.
The strategies below are all ways that you can embrace shrinkflation and make it work to your advantage.
Add more options
Go ahead an introduce a smaller size — even at the same price. But then, leave the size that customers wanted and price it accordingly.
Promote a Price Increase
Another way to beat shrinkflation is to generate urgency for your offer by promoting an impending price increase. Run a “flash sale” with a countdown timer and tell people that you WILL be raising the price and if they want that offer, they need to jump in on the deal.
Of course the most important thing to remember with this differentiation strategy is that once the timer ends — the price DOES go up.
Use this strategy if you have an audience that knows you and comes to your site often.
Run an Evergreen Flash Deal
This strategy is for niche businesses who are found via Google and will likely NOT return, but WILL grab your offer if it’s irresistible enough.
You can create an evergreen flash sale with a countdown timer that is always running depending on your browser.
You promote this as “YOUR flash sale” — because the flash sale will start over depending on your browser. So, if you come to the page from your laptop you’ll see the flash sale. Then if you wait several days and come back from a different location or on your mobile device, you’ll see a fresh timer.
Create a VIP Customer Group
Announce that you are creating a VIP customer group and list out all the benefits they will have by being a part of this group. The key distinction with this group is that they understand that they are paying more, but they are also GETTING more of what they want,
To make this work, you will need to understand what value-added products or services your customers have come to expect that you may not be able to support at the same price as before.
This is basically the difference between a Do It Yourself option that you can sell for a lower price and a Done For You option that includes a lot of handholding – or something in between.
Be Upfront, Transparent, and Raise Prices Without Fear
The bottom line here is that you should always be raising prices. But that doesn’t mean that you give your customers less than what they expected.
Stop looking at your product as a static bundle of features. Instead, pay attention to the small, but significant ways that you can improve your customers’ lives.
Don’t assume they won’t pay for it. Your customers value their time and the outcomes they’ve committed to so much more than the extra dollars they will pay to actually get that result.
Take a look at what your competitors are doing. Are they charging more for less? If so, you’re sitting on a goldmine!
