Always deliver more in perceived value than you charge for what you sell.
Never be afraid to talk to your customers about pricing. They are the only reliable source for learning for certain what your value is to them.
If you’ve over-priced your products and services, you likely won’t make enough sales to stay in business. And, if you’ve under-priced them, you’re short-changing yourself. Neither situation is a fair outcome for the effort invested in creating your products and services in the first place.
Most business owners are afraid to ask the question. But it is necessary to get you to the next step. Because, once you have confirmed what your value to your customers is, I recommend investing in delivering more than that to them.
And I don’t mean the “trumped up” value you often see in sales-oriented webinars — most of that isn’t real to begin with and smart customers know it. I’m talking about providing more than what you originally promised. By going above-and-beyond the customers’ expectations of your product or service.
A little creativity goes a long way here. Still, it’s important to focus on what’s going to be meaningful to your customer, to enhance their experience with what you’ve sold them and their post-sale interaction with you, and to give them something tangible and memorable that they had no idea they would also be getting when they bought from you. And, if you can make that thing something that no one else is giving as well then you’ve truly differentiated yourself from the competition. That’s always good for business!
About perceived value
Perceived value is the customer’s overall assessment of the utility of a product based on what is both received and given. This embodies more than just quality and includes concrete features as well as things like inferred status, convenience, safety and security, responsiveness to service and support needs and more. For example, branded products are perceived as more valuable than generic ones even when performance is equal. Free items provided as purchase incentives sweeten the deal even when there is no associated production cost. And the same information provided in one medium over another may be viewed as a higher-value experience, even when it isn’t.
How to increase perceived value
You affect the perceived value of your product or service through your marketing and advertising. This is your best opportunity for reframing your price through the magic of copy writing. The very notion of perceived luxury, scarcity, or altruism can paint an entirely different view of your product or service in the potential customer’s mind. As will addressing a customer’s fears and doubts in reducing purchase risk by offering a guarantee and adding social proof by including customer testimonials.
Packaging and product/service bundling are two more ways of increasing the perceived value of what you sell although bundling can be tricky and, if not done right, can work against you. Roger Dooley had this to say about that:
“If you are thinking about bundling multiple products, do it right:
- Avoid mixing a cheap item and an expensive item and simply promoting the package.
- If you are mixing products with different values, establish the value of the individual items first, particularly the most expensive one.
- Take a lesson from infomercial producers and emphasize the additive nature of bonus items.
- Focus on non-price attributes of the product (e.g., durability or comfort) – researchers say this will reduce the devaluation effect from mixed-value items.”
At the end of the day there are things you can do to increase the perceived value of your products and services without adding production cost to them. Take the time to listen to the voice of your customer and put yourself in their shoes. I’m certain you’ll be able to come up with several options that work for them and for you. Test them all to find out what works best to create sales, then go all in!
More next time. Until then, remember to LOVE YOUR WORK, whatever it may be.
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