How much would you spend on a pair of jeans? Maybe $50, or even up to $200 for a fancy brand? The difference in what you’re willing to pay isn’t just about how much jeans cost to make. It’s about how much you think they’re worth.
If a particular pair of jeans meets your needs and makes your life better, you’ll see them as more valuable, no matter their actual cost. This affects the price you’re willing to pay, how often you buy, and your loyalty to the brand.
Blue jeans weren’t always seen as high-value items, however. Originally, they were basic work pants, but then a cultural shift occurred, altering their perceived value and unleashing a marketing boom. If your products are in need of a similar boost, this guide will aid you in changing customer perceptions, leading to more sales and loyal customers.
Understanding the role of perceived value in marketing
Perceived value is what the customer believes your product is worth to them. Also known as customer perceived value, this is different from the product’s actual value, which is based on its features and costs.
Instead, the customer perceives your product’s value based on their own feelings, experiences, and lifestyle aspirations. Perceived costs, like the time and effort they invest in buying the product, can also impact this value calculation. The results affect how many people are willing to pay for your product and how much they want it.
For example, blue jeans went from affordable workwear to a fashion statement when James Dean wore them in the 1955 film Rebel Without a Cause. Suddenly, they represented rebellion, independence, and a desirable lifestyle. This change in perception boosted customers’ perceived value of jeans, paving the way to higher prices and more sales.
It’s not just about celebrity endorsements, however. Electric vehicles became practical alternatives to gas-powered cars as climate change concerns grew. Quinoa gained superfood status as people became increasingly aware of its impressive health benefits. In each case, people’s emotions, identities, and experiences shaped how they judged a product’s value. This created opportunities for savvy business owners and marketers to take advantage of these changes in perceived value.
Most common types of customer perceived value
Knowing what customers find important can help meet their needs well. Since customers value different things, it’s important to understand what matters to them. Here are 4 common types of customer perceived value to consider.
Monetary value
Monetary value is all about the product’s price. Customers want to ensure they’re getting a good deal. They compare prices, look for discounts, and see if the benefits are worth the cost.
Customers often seek affordability and cost-effectiveness to get the most for their money. But sometimes, higher price tags can work in your favor by making your items feel more exclusive and desirable.
Functional value
Functional value is about how well your products work. Customers want reliability, efficiency, and ease of use. They want something that will meet their needs without causing any additional hassle.
Products with high functional value can streamline tasks, save time, and enhance productivity. They often come with intuitive and practical features, ultimately making your customers’ lives easier and more convenient.
Social value
Social value pertains to how your product fits in socially. Customers want products that match their social identity or lifestyle. This could mean buying things that show the customers belong to a certain group or that reflect their values.
Your business can leverage social value by associating with celebrities, influencers, or causes that are important to your customers. This connection helps people feel more personally invested in your business, strengthening their sense of belonging and loyalty.
Psychological value
Psychological value revolves around how your offerings make people feel. It’s about happiness, satisfaction, security, or feeling important. Customers like products that trigger positive emotions, boost their confidence, or just make them feel good.
To tap into psychological value, you must create brand experiences that emotionally connect with customers. This might involve storytelling, personalized messaging, or hosting exclusive events for loyal customers.
Why companies should elevate the perceived value of a product
Successfully elevating the customer perceived value of your offerings comes with many benefits, including:
- Improving customer satisfaction
- Fostering positive brand associations
- Strengthening customer loyalty
- Increasing sales for higher annual profits
- Driving word-of-mouth marketing
Simply put, focusing on perceived value ensures your customers see what your products are worth. It’s how you attract and retain more customers, leading to increased sales and a stronger reputation.
Strategies that boost customer perceived value
As the perceived value of products naturally changes with shifts in people’s emotions, experiences, and lifestyle aspirations, companies get opportunities to grow and thrive. But you don’t have to wait for such shifts to unfold on their own. Instead, you can use proactive strategies to actively shape how customers perceive the value of your products.
Learn what customers want with market and audience research
Before you can increase perceived value, you need to understand what your customers want and need. This involves diving deep into research about your target market to gather insights about their preferences, pain points, and expectations.
You can do this by conducting polls and surveys, analyzing social media trends, and reviewing your website data on Google Analytics. Additionally, consider hosting focus groups or one-on-one interviews for even deeper insights.
Work diligently on improving your company’s reputation
A positive reputation builds trust and credibility, 2 key factors that help drive the customer perceived value of your offerings. To begin, make sure everything you sell is top-notch and that you always respond quickly to customer feedback.
Also, show that your company helps the community and the environment. Corporate philanthropy can make people feel good about buying from you. Use social media to spread the word about the positive things your company does and invite your customers to support your efforts.
Experiment with customer perceived value pricing for your products
Adjusting your pricing strategy based on what people think your product is worth is a clever way to increase customer perceived value. This means figuring out what parts of your product people like best—its quality, how it makes them feel, or what makes it different. Once you know that, you can set your prices to match what customers value.
One example of a brand that does this well is Porsche. This car company stands out due to its exceptional performance and luxury and the prestige associated with owning one of its cars. Knowing this, Porsche sets its prices high to reflect these qualities. Customers who value those qualities are willing to pay a premium for it.
Conversely, making your products affordable can also make them seem valuable. Take IKEA as an example. They sell stylish and useful furniture at low prices. IKEA keeps its costs down and lets customers save money, making people feel like they’re getting a great deal.
Create a sense of exclusivity through scarcity and limited-time offers
By introducing scarcity and limited-time offers, you tap into the customer’s fear of missing out (FOMO), increasing your product’s perceived value. This could look like releasing a special edition of your product in a unique color or with exclusive features. Or you might offer time-sensitive discounts or bundled packages to create a sense of urgency.
Highlight the product’s utility in your marketing and sales efforts
When you market and sell your products, focus on their overall utility in any of these 5 areas:
- Form utility is the design and aesthetic appeal of the product.
- Task utility refers to your product’s ability to perform the task or function customers need it for.
- Time utility is the availability of the product to customers when they need it.
- Place utility is the convenience and accessibility of purchasing the product from various locations or channels.
- Possession utility refers to the ease of the purchase process and the satisfaction of owning the product.
At its core, focusing on utility means showing customers how your products can solve their problems or make their lives easier.
For example, if you’re selling a smartwatch, don’t just discuss its features like heart rate monitoring or step tracking. Explain how it helps users stay healthy and fit or keeps them connected without needing their phone. You can do this through videos, demos, or customer testimonials.
Fuel social media buzz to stir up excitement about your brand
Fueling social media buzz is a great way to get people excited about your business and its products. Consider these methods to make it happen:
- Engaging content: Get creative with your posts. Use bright visuals, tell interesting stories, and add interactive elements to grab attention and get people talking about your product or service.
- Showcasing social proof: Highlight customer reviews, testimonials, and success stories to build trust with potential customers. When people see others loving your business, they’ll perceive your products as more valuable and desirable.
- Influencer partnerships: Team up with influencers who vibe with your business. They can spread the word to their followers, boosting your brand’s visibility and credibility.
Integrate these tactics into your social media marketing campaigns to ignite chatter about your business. The buzz generated will attract new customers and help people see your products in a new light.
Increase customer perceived value for true marketing excellence
Changing customers’ perceived value of your products is no easy feat. But it’s undeniably worth the effort. By elevating your product in your customers’ eyes, perceived value sets the stage for greater customer loyalty and higher profit margins. It’s what gives you a competitive edge that sets your business apart in a crowded market. So, get started today to turn vision into value and shift your items into the spotlight of consumer desire.