Here’s a bottom-line statement that most can agree with: if customers do see the value in your product, they’re not going to be as likely to purchase it, and you’ll be less likely to maximize your potential earnings through sales. What you need, in order to bring those numbers up, is to focus on perceived value. Here’s the how and why of its effects on your prices…
First things first—when we’re talking about perceived value, exactly what are we referring to? We all know there’s a flat, objective monetary value that’s derived from the cost of manufacturing your product. There’s also the value that’s derived from what your customer thinks about your product, how they perceive it, your “perceived value,” as it were.
Because of perceived value, you could, potentially, have two products with the same “actual” value that sell for significantly different prices—because the customer feels that one is more prestigious, trendy, or fashionable than another. In the customer’s mind, one has greater value, and so, they’re willing to spend more (even if those products are exactly the same).
How can this apply to your business and your product? Because perceived value is something generated in the customer’s mind, it’s something that you can change, given the right conditions and right steps. What may those be, you’re thinking? The following tricks should give you some insight into how to start boosting your perceived value in a positive way:
Make your product seem exclusive: Scarcity, as you may already know, can have a profound effect on the psyche. We see it in nature, and it applies to consumer purchases as well. If you can make your product seem scarce—that is, finer, more prestigious, more elite—then you can position it as an option that commands a higher price.
Pinpoint your target audience: No product is a fit for everyone, so by honing in on your target audience, you can ensure that you’re marketing to those who A) understand the value of your product, and B) are willing to pay a premium for that value they’ll be receiving. Know your base, and be sure your value selling strategy is tailored to them.
Make it a “feel-good” purchase: You know what’s even better than making a useful purchase? Making a useful purchase you can brag about. Add a hook that makes your customers feel good—eco-friendliness, fair trade, sustainable sourcing—and it becomes that much more valuable in the minds of many customers.
Maximize value; minimize risk: One thing that puts customers off of big purchases is that perception of risk. If you’re able to minimize those feelings, they’ll be more likely to drop top dollar on your product. This is where freebies like covering shipping costs can come into play, and providing warranties on everything that you sell.
Walk the walk: If people know something works, they’ll be more likely to try it. Nowadays, with the power of social media, you can show large numbers of your target audience just how effective your product is, and include authentic testimonials to sweeten the pot.
Keep it concise: No need to offer 7,001 choices to the customer. Give them the essentials, explain why and how they work, show the value, and watch those sales grow.