Perceived value is the amount that a customer is willing to pay for a product or service. You may find yourself at the register ready to pay $50 for a product only to find out that it only costs $30. This is a direct result of perceived value.
You can leverage value perception to increase conversions and sales with digital marketing. If a customer's perceived value is higher than the price of a product or service, odds are they are going to purchase. We are going to dive into tools you can use to increase your perceived value to boost sales.
Why Is It Important?
Would you rather lower your price or increase your perceived value? Increase your value of course! This is basically the reason for marketing and advertising. This is why we have a marketing budget to show our audience why we are worth it.
The job of marketing professionals is to mold and raise the value of the goods or services that you're offering. The higher the value that customers assign to your goods or services, the more they are willing to pay and the more money you're going to make.
Features Vs. Benefits
There is a reason that we have heard of this concept time and time again. Of course, what your product or service does is extremely important. Your company took time, money and energy to develop a product. However, it is far more beneficial to explain to customers why it is going to benefit them rather than what features the product has.
Remember that your customers are probably thinking "What's in it for me?" and answer that question through your marketing. Sell the result and not just the product.
Follow Through
Don't over-promise and under-deliver just to boost the value of your product. We know you already will, but make sure you are following through on your promises of how your product is going to benefit the customer. In a world of reviews and testimonials at our fingertips, customers are bound to share the good news of the product or service they received from you. Everyone wins when you build up the benefits of your product, the customer loves the result and spreads the word about your company.
Increase The Price
This can be intimidating, but it is proven. Sometimes, consumers are likely to pay more money for items that are perceived as a luxury.
Stanford GSB and the California Institute of Technology performed a study and the results may surprise you. Participants of the study were told they were receiving two different wines. One priced at $5 and the other selling for $45. However, they were tasting the same exact wine. Researchers found that when the participants thought they were tasting the more expensive wine, the part of the brain that experiences pleasure became more active.
Build Social Proof
People copy the actions of others in certain situations. This can be used to your advantage. When customers see others interacting with your ads, liking, commenting, etc. they are more likely to join in. Make your ads so captivating, that users feel like they have no choice but to jump in on the conversation, check out your business and purchase your product.
When people see others interacting, they view your brand as having a higher value versus brands with little to no interaction. Dive deeper into social proof here.
Leverage FOMO
The Fear Of Missing Out can lead people to make decisions that they maybe wouldn't have typically. Regardless of cost, people are more likely to purchase the last available product or take advantage of a soon-to-expire offer. Even if you don't sell a physical product, roll out a limited time offer and see those sales increase. Conveying scarcity creates a sense of urgency that customers don't want to miss out on.
In Conclusion
As we could see in the wine example, value perception and actual value go hand-in-hand. Increasing the value of your product or service can lead to increasing the actual price of your goods and lead to more revenue. Building value will lead to more conversions, sales and is a win-win for you and your customers.
Happy Hunting!
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