So you’re in business to make money, at least, that’s sure to be one of the main reasons, although your corporate mission statement probably doesn’t word it quite so bluntly! The challenge that many companies face is how balance remaining profitable with ensuring that their products are offered at a price that consumers regard as reasonable. This is where perceived value can make a huge difference…
What is perceived value?
According to investopedia.com…
“Perceived value is the worth that a product or service has in the mind of the consumer. For the most part, consumers are unaware of the true cost of production for the products they buy; instead, they simply have an internal feeling for how much certain products are worth to them. To obtain a higher price for products, producers may pursue marketing strategies to create a higher perceived value for their products.”
You’ve probably heard the saying “it’s worth what someone’s prepared to pay for it” – well that’s perceived value in a nutshell. It applies to almost anything, from houses costing millions of pounds to consumable items costing only a few quid each. Perceived value affects us all and influences every buying decision we make.
So why does perceived value matter to me?
You want to convert as many sales as possible whilst maximising profitability, right? Sounds simple but these two factors can work against each other – you may feel that you have to reduce prices in order to make more sales but this obviously impacts your bottom line. But what if you could to increase the perceived value of your offering? In that case, the complete opposite could be true and customers might be willing to actually pay more for the same product!
Sounds too good to be true? Here are a few ideas to get you started…
- Consider increasing your prices. This might sound crazy in today’s ever-more-competitive marketplace but studies have shown that if something costs more our natural inclination is to presume that this is an accurate representation of its quality (which is of course often the case) so it is therefore superior to a lower-cost alternative.
- Add some exclusivity to your offering. By making your product seem unique or scarce in some way you’ll add urgency to the buying process. Who of us isn’t tempted to grab a Creme Egg McFlurry around Easter time every year? After all, they’re a ‘limited edition’ and just too good to miss!
- Think about what’s in it for the customer. We all want to feel good about a purchase. Remember getting your first pair of branded trainers when you were a kid? They made you feel invincible – like you could run faster, jump higher, play better than anyone! Think about ways in which you could help your customers to experience this same warm fuzzy feeling every time they interact with your company. Sell the benefits (not just the features) and watch customer loyalty skyrocket!
- Raise your design and branding game. Badly designed packaging and POS material doesn’t do any favours where perceived value is concerned. Be sure to hire a professional designer who will ensure that your branding is consistent, images are high resolution and copy is well-written, clear and easy to read. Don’t settle for less.
Of course, this isn’t a comprehensive list – we could go on and on! The point is that by increasing perceived value and making your offering more desirable you can increase conversions and avoid profit-reducing price cuts.
What other creative, value-adding ideas can you think of for applying to your products or services?
For further guidance on adding perceived value through creative design and print please contact our team of friendly experts on 01444 236204 or drop us a line anytime. We’d love to share our knowledge and experience and with you.