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Customer’s assessment of your product or service offering influences their willingness to pay for it. This product assessment, to a large extent, forms the customer’s perceived value. Simply put, customers will almost always try to figure out if the benefits that come from buying your products (or services) are worth its cost.
Nowadays, customers research a product online before making a buying decision. And these researches go beyond comparing the features and specifications of the product. Customers’ decision to buy your product boils down to the value they see in the product.
The success of your business, in many ways, is tied to the perceived value of the customer — and you should focus on increasing it. Consumer perceptions of value also affect things like sales and prices.
Definition: The perceived value of the customer is how your target audience thinks about your product. Do customers care more about your product, or not? The way your target audience evaluates your brand offering plays a crucial role in determining whether or not they will buy from you.
Before making a purchase decision, consumers often weigh the product. They will want to know if such a product will help them to solve their problems. Their attitude towards the product will determine whether or not they pay for the product. Products that consumers perceive to be of high value are most likely to be purchased by consumers, while products that consumers perceive to be of low value may lead to fewer or no sales.
Customer perceived value tells you how customers value the product. Products that consumers perceive as more valuable are more likely to command higher prices in the market, as well as receive more support. On the other hand, products that consumers perceive to be of low value are more likely to be sold at lower prices with less acceptance.
The customer’s perceived value of your products is a surefire way to set higher prices and maximize profits. To increase the perceived value of your product, you need to know what your audience’s challenges are and how to help them solve them. A thorough market analysis will give you an idea of what your target audience needs.
This section highlights simple ways to improve your customers’ perceived value.
When there is limited availability of a product in the marketplace, it could mean one of two things. First, it could be that the product is out of stock, or it’s a rare commodity. And rare commodities are always valuable!
This strategy is usually used by e-commerce business persons to induce Fear Of Missing Out (FOMO). Web copies that induce FOMO typically have phrases like:
Customers typically associate high prices with quality. Robert Cialdini, a social psychologist, explains that highly-priced products are always seen as products of high quality, especially when a customer is not familiar with the product.
Demonstrating that the product’s worth is more than the stipulated price tag is another way of increasing the customer’s perceived value. For instance, if you’re offering a bundle discount (or running a sale), show the original price of the product. You can also show other benefits of using the product — and that could be the time or resources gained by using the products, and what they’re valued at.
Nowadays, product prices end in “.99”. For instance, the price of a $500 product is always displayed as $499. This is the charm pricing strategy, and it’s due to the perception that comes with “odd prices.” Customers tend to see odd prices as cheaper than they are. Using the charm pricing strategy could be the difference between a high converting campaign, and a campaign with a relatively low conversion rate.
Customers who shop online can’t physically touch and feel your products. Having sleek images can be a good alternative to this limitation. With high-quality visuals, you can easily show the benefits and features of your products. This will, in turn, increase the customer’s perceived value of the product.
Reviews and Testimonials from previous customers can serve as social proof. And having social proof has been shown to boost the conversion rate of a product. Research has shown that customers trust online product reviews more than the product description. Incorporating customer reviews and testimonials into your marketing campaign is one of the best ways of demonstrating the value and worth of your brand offering. It also builds loyalty and credibility in the minds of your audience.
Having an excellent customer support unit leaves a lasting impression in the minds of the customers. When customers tie positive emotions to your brand, you’ll more likely record repeat businesses with them. To get the most out of your customer support services, personalize each support experience for each customer. Excellent customer support, to a large extent, translates to a higher customer retention rate and increased customer perceived value.
Always ensure to leave a positive experience with customers who interact with your digital assets. To make that happen, you will have to optimize:
You should focus on figuring out what resonates with your audience. What factors drive their emotional reactions to your products, and what benefits are they looking forward to? You also need to figure out the challenges they’re looking to solve. Craft your unique value proposition in such a way that resonates with your target audience.
Customer perceived value can be influenced by product/service-related, price-related, experience-related, or external factors. Here are how all these factors influence customer perceived value.
Do your products solve your customer’s challenges, and meet their needs? Is it properly made, reliable, and durable? Is it user-friendly, and is it better than other products in the marketplace?
Discounts, promotions, and special offers always enhance the perceived value of your products. You should also incorporate flexible payment options into your business operations.
Offering personalized products and a sleek customer support experience will likely influence the customer’s perceived value. And if your product evokes positive emotions, then you’re sure of having an increased customer perceived value.
Factors like reviews and testimonials from previous customers, influencer endorsement, and the customer’s values can influence the perceived value of your product (or service) offering.
The customer value can be calculated using the perceived value or the desired value model. The customer’s expectation before the purchase of the product is the desired value. Cost is always involved during the calculation of the perceived value.
Perceived value = Tangible product benefits/Cost paid
The actual value of the product is determined after the product has been bought and used by the customer. If the actual value is above the perceived value, the customer value becomes high. However, the customer will more likely experience buyer’s remorse when the actual value is less than the perceived value. In such cases, there’s a low customer value — and the possibility to record repeat purchases becomes almost non-existent.
The four customer value types are:
One way of evaluating customer perceived value is by dividing the tangible benefits by the costs paid. That is;
Perceived value = Tangible product benefits/Cost paid.
Here are the 4Cs of marketing:
These 4C’s will show you if a business will succeed or not. The customer is the major ingredient of a marketing strategy. If you’re unable to attract customers and make them buy your products, generating profit will be quite challenging.
The four components of customer value are:
Customer perceived value is much more than a marketing buzzword — it’s the bedrock of brand success and customer loyalty. By having a good grasp of how your customers perceive your products, you can take steps toward influencing their buying decisions. Furthermore, it can also help you:
Always keep in mind that customer-perceived value is an ever-evolving market dynamic. Keep gathering feedback from your customers, experiment with your brand messaging, and stay on top of evolving market trends.
By focusing on your customer’s perceived value, you’ll begin creating a robust marketing strategy that resonates with your target audience.
Now you know what customer perceived value in marketing is, what steps will you take towards improving your customer perceived value?
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