What is the definition of value, and how can you convey the right mix of a product value to your customers? Actually, it’s all in the mind.
As a startup owner or someone who has just ventured into the world of business, you probably hear words like value, customer value, and value perception a lot.
I used to hear them all the time during my days at university, especially in the subject of marketing. It wasn’t until I studied for my MBA and entered the business world that I realized the real meaning of value in marketing.
Think about it this way: you’re a customer looking to buy a certain product.You have certain benefits in mind that you expect the product will deliver, and you’re willing to pay a certain or a maximum amount of money (cost). When you go to buy this product,you come across two types. Let the mind games begin!
Product 1 has a price tag of BD 50, while Product 2 is BD 80. You look at both of them, and wonder: Which one should I go for? Here comes your role where you perceive the value of each product. You feel inclined to buy Product 2, but then you think, Is it really worth getting? It costs more, but Product 1 will do the job anyway. But wait—Product 2 has a better design. Next, you decide: if Product 2 is really worth the cost you are about to pay compared to its expected benefits, you will probably end up buying Product 2.
Looking closely at the above scenario, notice the words in bold: they really explain what Customer Perceived Value is. Investopedia defines it as “the worth that a product or service has in the mind of the consumer. The consumer’s perceived value of a good or service affects the price that he or she is willing to pay for it.” Now let’s talk about 4 techniques for increasing the perceived value of your product:
1- Sell at a higher price. It’s a mind game, selling at a higher price might change the perception of how your target customers look at your product. They may think, “Oh, it’s more expensive than the other one, so the quality must be better. Let’s get this one.” Be careful, though: there is always a limit to the price that customers are willing to pay for a product.
2- Demonstrate how it is made. One of the most powerful techniques is to show your customers how you actually make the product, especially if you are in the food business. This shows the effort that goes into delivering the final product to the customer, who can then appreciate the price they paid.
3- Back it up with a guarantee. This is effective. Imagine buying a product with a lifetime warranty. Wouldn’t you buy it, even at a higher price?
4- Testimonials and endorsements. Include real testimonials (not fake ones!) from actual people who have used your product. Ask famous people known within your area of business to endorse it. Please do not fake your testimonials or ask people outside your area of business to endorse your product. It’s like asking a fashion blogger to say how reliable your new Android tablet product is!
Getting to the right value definition of your product is a complicated process. Most companies spend time analyzing it and trying to understand the mindset of their customers. It’s all a big mind game!
