Buyer Types

A set of categories that describe the spending habits of consumers

What are Buyer Types?

Buyer types are a set of categories that describe the spending habits of consumers.

Consumer behavior reveals how to appeal to people with different habits and preferences. The spending habits of a company’s consumer base significantly affect its overall business. Understanding the different behaviors of buyer types is crucial no matter the product or service. With regard to marketing, there is no “one size fits all” approach.

 

Buyer Types

 

Types of Buyers and their Characteristics

Buyer types fall into three main categories – spendthrifts, average spenders, and frugalists.

 

1. Spendthrifts

Spendthrifts are a group of consumers who spend without hesitation. The spendthrifts feel little or no pain in making a purchase. They love purchasing what catches their eye immediately. Spendthrifts are more likely to resort to impulse buying. They need minimal convincing to make a purchase. They form the smallest percentage of the overall population.

A lot of people misjudge spendthrifts and brand them as materialistic and extravagant. However, it would be more appropriate to describe them in terms of when and where they feel the pinch in the entire purchasing process. They rarely feel any purchasing pain until after the purchase is complete. Below is a list of the characteristics of spendthrifts:

  • They lack self-control in spending.

Spendthrifts are not able to exert any level of control when exposed to spending situations. The only control they can access when exposed to spending situations is a lack of money, low credit score, maxed credit cards, or other strict economic factors.

  • They are more likely to incur debts.

Spendthrifts tend to overspend and overindulge. Since they experience minimal pain in parting with their money compared to the general population, they are much more likely to borrow in excess to satisfy their spending habits.

  • They are not savers.

Spendthrifts anticipate purchasing and don’t feel the need to save. In the same way that they don’t experience the pain of purchase, they also don’t feel the pinch of not saving consistently, until they encounter a situation where they need to have some savings (such as losing a job).

 

2. Average Spenders

Average spenders spend on what they believe is appropriate. They weigh their options and decide on what they think is a good investment. Average spenders know how their budget looks, and thus they act accordingly. The following describes the average spenders:

  • Average spenders weigh their options and think about a buying decision for a while. They consider their decision criteria, make comparisons, search for discount codes, and finally make the decision.
  • Average spenders seldom overspend or get involved in dramatic episodes of impulse buying. They may occasionally exhibit the behavioral characteristics of a spendthrift or a frugal.
  • Average spenders are influenced by facts, but they are not fully controlled by those facts. They are partly influenced by messaging but will take their time before making a purchasing decision. They need to be persuaded that they are making the right choice, which happens when exposed to both data and emotional messages.

 

3. Frugalists

The frugalist is the terminology that is used to describe people with a tendency of holding onto and saving their money as long as they can, as opposed to spending it. Frugalists prefer to save rather than to spend money. They love to keep their money safe in a savings account rather than spend it.

Frugalists respond less favorably to marketing advertisements and commercials. They are controlled by the amount that they believe the products should cost and not what is being advertised. They demonstrate a low attitude towards spending and believe the amount they spend should be consistent with their budgets. They don’t indulge in luxurious expenditures. Frugalists are budgeters and planners.

The characteristics of frugalists are as follows:

  • They feel the pain of purchase.

Since frugalists do not anticipate a purchase, they are likely to avoid it altogether. Spendthrifts feel the pain after the purchase, which is too late, but for frugalists, the pain is prior, which can prevent the purchase.

  • They are overly self-controlled.

Frugalists exercise self-control when it comes to financial and spending matters. They tend to stick to their financial plans, and may even aim to spend under their budgets.

  • They are savers.

Frugalists experience more security since they hold onto their money. They are likely to forgo a purchase just to save their money. While average spenders commonly set aside a portion of each paycheck for the purposes of saving, frugalists tend to set aside significantly larger percentages.

 

Types of Buyers

 

How to Appeal to the Three Buyer Types

 

1. Selling to a Spendthrift

Spendthrifts spend more with minimal convincing and save less. They are, therefore, your dream customers. The money they spend is not controlled by factors such as budgets or financial plans. They feel little buyers’ remorse and are rather driven by emotions. Selling to a spendthrift requires you to:

  • Make your adverts with elements that trigger emotions and feelings, with a lot of visuals. To illustrate, using crowd-pleasers such as cute babies and puppies can be ideal for products and services aimed at spendthrifts.
  • Leverage color psychology to increase appeal and conversions.

 

2.  Selling to an Average Spender

The average spender, just as the name suggests, falls in the middle, between frugalists and spendthrifts. Average spenders spend on an item that they think makes a good investment, while trying to save. They still indulge but within reason. They take their time to reason whether the items are worth the indicated or quoted prices. Average spenders are driven by both analytics and emotions and so, to appeal to them, one must:

  • Strike a balance between appealing to emotion and providing quantitative analytics.
  • Include a warranty, a money-back guarantee, or free shipping to appeal to their spendthrift characteristics and encourage them to buy with no fear.

 

3. Selling to a Frugalist

Appealing to a frugalist takes time and does not happen spontaneously. To sell to a frugalist, you need to take into account the fact that, if it is not within what they initially budgeted for, they are likely to reject it. To appeal to a frugal, you need to:

  • Use negative emotional signals and words in your sales copy and adverts. For example, avoid saying “you deserve this” and instead say, “Secure your future by investing in this.”
  • Make use of data, numbers, charts, and graphs to convince them, instead of just employing emotional appeals. Frugalists need to see, through quantitative measures, that they are getting the best value for their money.
  • Be honest, precise, and straightforward with your pricing and product description.

 

Bottom Line

There are three different buyer types – spendthrifts, average spenders, and frugalists. Their purchase journeys and criteria can significantly differ, requiring businesses to be aware of their needs in order to appeal to each type. Understanding which techniques appeal to each buyer type can be very helpful when designing campaigns for a specific consumer segment.

 

Related Readings

CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional CFI resources below:

  • 5 P’s of Marketing
  • AIDA Model
  • Brand Equity
  • Market Positioning

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!