Give Your Perceived Value a Boost
80s cartoon villains always had an object of their heart’s desire. Take Skelator, he had a perceived value on Castle Grayskull and it’s “fabulous secrets.”
Skelator certainly paid the price for that perceived value in every episode. Not in money but in defeat and the loss of his resources.
Through some possible clever marketing on the part of He-Man and his allies, Skealtor believed that Castle Grayskull was well-worth the effort and cost.
A customer’s perceived value can sway them into paying what they believe is a fair price. Let’s take a look at how you can leverage this.
What is Consumer Perceived Value?
Consumer perceived value is what customers feel they should pay for the benefits from a product or service. It has nothing to do with a product’s actual value. And has everything to do with our own crafted narrative about a product or service.
Sometimes we create these narratives ourselves. Or they’re crafted for us through clever marketing and advertising.
A classic example of this: diamonds. Let’s spill the T on these shall we.
Diamonds are a common stone, controlled by the De Beers Corporation. Not rare. At all. Mind blown. We know.
But it’s not De Beers’ monopoly on the extraction and release of diamonds that’s created our perception of value for them. Tho’ that’s played a part.
Mostly, however, it comes down to marketing. Back in the day, they convinced us to drop some serious cash for an engagement ring.
We can also break it down mathematically. Yes, there’s some math. If the customer considers the expected benefit is greater than the perceived cost, then that goes into their perceived value.
Customer’s Expected Benefit — Customer’s Perceived Cost = Customer’s Perceived Value
Okay, so that ends our math lesson today. Thank goodness.
The Power of Price Reframing
Now it’s possible to increase your product’s perceived value without increasing its costs, both to make it or to sell it. You just have to change people’s perceptions. Change the conversation, so to speak.
One caveat: we’re not advocating for going all snake oil salesmen on your customers. You don’t want to overpromise and underdeliver. That’ll harm you even more in the long run.
How to Boost Perceived Value
Let’s take a look at how you can boost your perceived value with little cost to you.
The First One is Free
People are irrationally motivated by the word “free”. A free trial can showcase the value of your product so they’re willing to pay a higher price when the time comes. Or you can increase sales by offering a free add-on, etc.
Costco is the king of free. Walk through their warehouses and you can fill up on all their free samples.
Keep Your Choices Limited
Having too many choices can hurt sales. People choke up when presented with too many options. You want to offer them as little choice as possible so they can make swifter and better informed decisions.
The Higher the Price, the Better the Pleasure
You can increase the price so long as you also sell the perceived pleasure from your product. Luxury handbags are a classic example. Same with wine. The more expensive the product, people are more likely to associate it with quality.
Appearances are Everything
If an influencer promotes your product, then that validates it with your potential customers. Same with your entire brand experience . If you have a great end-to-end experience, then that goes a long way to building trust with your audience. The more trust, the more people will pay up.
Make It Exclusive and Scarce
Nothing boosts sales more than good ol’ exclusivity and scarcity. The more exclusive an item, like a Yezzy sneaker release, or the more scarce it is, the McRib, the more folks want it. And they’ll be willing to spend the cash to get it. Or stand in really long lines to get one.
What’s Your Perceived Value?
One way to gauge your current perceived value is to survey your target audience. You can do this through Helio, sending them a quick survey.
And speaking of free. It’s free to sign up! (See how we tied it back.)