9 min read
Opinions expressed by Entrepreneur contributors are their own.
Do your prospects see the value of your product or service? Have you done everything possible to increase your product or service’s perceived value? When you make providing benefits to your customers your driving force, you create a great experience for them and success for yourself.
What is perceived value?
In his book, Value-Added Selling, Tom Reilly calls value, “What someone gives up, and what someone gets in return.” And that perceived value describes the look and feel of things. “It is largely sensory: how something looks, sounds, feels, smells, and tastes.”
In other words, the perceived value of your product or service let’s your customers feel good about buying from you. It gives them that cozy feeling that the decision they’re making is the right one.
Business Dictionary defines perceived value as, “A customer’s opinion of a product’s value to him or her. It may have little or nothing to do with the product’s market price, and depends on the product’s ability to satisfy his or her needs or requirements.”
So how do you demonstrate to your prospective customer your product’s ability to satisfy “his or her needs or requirements”?
Related: 5 Strategies for How to Make Customers Trust Your Brand
You justify the value of your product or service
Right now, one or more of your prospective clients is wondering if she should buy your product or service. It’s an emotional experience for her. And did you know that as she is evaluating your product or service, she’s having a conversation with herself?
Indeed.
What’s going on is she wants facts and reasons to justify buying your product or service. And not just to herself, because ultimately she’ll have to justify it to a friend, a boss, or a spouse.
1. Focus on the outcome customers seek
A good way of increasing your product or service’s perceived value is to focus on the outcome your customers seek. For example, for an event organizer, this might be for more people to attend the event. And a hotel might want to Increase room occupancy.
So rather than focusing on your need to sell, focus on your customer’s need to buy. Focus on the benefits they’ll get from your product or service. You do this by selling a solution.
When we say “sell solutions/benefits and not features,” it means that whatever you sell has to solve a problem. Only when your product or service solves your client’s problem does it become a solution.
This not only gives you a competitive advantage; it improves your relationship with your customers and allows you to demonstrate your value.
You can further demonstrate your value by exceeding a customer’s expectations. So, find out what motivates them, and go above and beyond what the competition offers.
Tom Reilly tells the story of a driver who goes beyond expectations by adjusting his route for the convenience of his customers. He records the man as saying, “I want to make it easy for our customers to receive our deliveries. Other drivers won’t do that.”
This driver knows what outcome his customers want, and he makes it a habit to deliver that outcome. In doing so, he’s creating a better experience for them.
2. Increase the perceived value with social proof
Another way to increase the perceived value of your offer is with social proof. Social proof comes in many forms: testimonials, case studies, or logos of companies you worked with placed on your website.
Using testimonials is a popular way of showing social proof. A testimonial is a great way to simplify the buying process. It provides perspective. You’re showing prospects that people love doing business with you; that if these satisfied customers trust you, they can trust you, too, which leads to an increase in conversion.
Even when your prospects think you’re being biased, they’ll assume the words of your customers are true.
When using testimonials, it’s a good idea to include a photo of the person giving the testimonial. Research shows that people like to look at other people’s faces. So if you can, include a decent picture with the testimonial.
Adding a picture to the corresponding testimonial also increases the “truthiness” of the claim since researchers have demonstrated that when a picture is paired with a claim, people believe the claim to be true.
Related: Increase Your Perceived Value With Social Proof — and Charge More
3. Provide contrast
If you’ve ever compared one thing to another, or one person to another, then you’ve used the contrast principle. When we say a particular woman is beautiful or a particular man is handsome, it’s in comparison to someone else.
This principle was made popular by Robert Cialdini in his book Influence. Contrast is the use of comparison to form perceptions.
In other words, the contrast principle affects the way people see the difference between two things shown one after the other. “Simply put, if the second item is fairly different from the first, we will tend to see it more different than it actually is,” Cialdini said.
In a study Cialdini cited, college students rated a picture of an average-looking person of the opposite sex as less attractive if they had first looked through popular magazines.
Another study had male students rate the picture of a potential blind date. The male students who rated the picture while watching “Charlie’s Angels” rated the blind date as less attractive than those who rated her while watching another show.
In comparison to the beauty of the “Angels,” the blind dates seem less beautiful, less desirable.
What does this mean for marketers?
Marketers can leverage the contrast principle to their own advantage. You compare a poor quality product to the one you want to sell. Some marketers will show products whose price range is way out of reach of the potential customer. This makes their products seem reasonable, a tactical way of defending the value and price of their own product or service.
For example, real estate agents exploit the contrast strategy by showing buyers a dilapidated house or one above the buyer’s budget before showing the house they want to sell.
By doing this, the agent gives buyers something to compare the house or property with.
You can also take advantage of the contrast principle by providing a price comparison of your product or service with competing products. And show how buying from you gives them better value for their money.
4. Add scarcity to your product or service
Scarcity is a big factor in why we buy. And when you add scarcity to your offer, you increase its perceived value.
Scarcity is a situation in which you have a limited number of resources along with a greater demand for that resource.
People like to have a one-of-a-kind item. Something that no one else has.
Tell people your product is limited or for a limited time only, and they want it more.
For example, if you’re doing a launch, you add a deadline. Once the deadline is reached, the product is removed. Or you could have a discount where the price goes up after the deadline. Some marketers offer bonuses that expire when the deadline is reached.
What you’re doing is stimulating passive prospects closer to action. Since humans have a natural fear of loss, you let your prospects think that if they fail to act now, they’ll miss out. And they’ll feel terrible.
5. Focus on the experience
Some marketers appeal to consumers by focusing their attention on money. However, focusing a customer’s attention on the experience they get from interacting with your product can lead to a long-term emotional connection with your product or brand.
In their study, Jennifer Aaker, professor at Stanford University, and her coauthor, Cassie Mogilner, said:
“Because one’s experience with a product tends to foster feelings of personal connection with the product, activating time (vs. money) typically leads to more favorable attitudes and decisions.”
Aaker and Mogilner argue that activating time while consumers evaluate a product causes them to focus on their experiences using the product, which will influence their personal connection to that product.
However, for high-priced products like luxury items that reflect social status, keeping the focus on price can be effective, especially for materialistic consumers.
Aaker and Mogilner’s view is based on a series of experiments they conducted to determine whether the mention of time (vs. money) changes the way consumers evaluate products.
When we’re faced with making decisions or evaluating products, emotions from previous experiences influence how we make decisions: Our experiences, feelings, and beliefs affect how we buy. So focusing customers’ attention on time spent with the product is a sure way to get their business.
Summing Up
When you increase the perceived value of your product or service, you normally improve conversions. And your customers will feel good about buying from you. And feel good about themselves when they feel they’re getting a good value.
So give your customers the desired outcome they’re looking for. And give yourself a boost in conversion.
Related: 7 Ways To Add Massive Value To Your Business
https://www.entrepreneur.com/article/363233