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Perceived Value is one of the most important elements in the marketing funnel. Ideally, it should be higher than the actual value of products so that customers perceive your product as high value compared to others.
But still, many marketers fail to implement or incorrectly use perceived value techniques in their offers and end up not getting the best results they could be getting.
In this article, I will show you what perceived value is and how to use it to make your offers more powerful.
What is Perceived Value?
The theory of perceived value is that customers will pay more for a product if they think it’s worth more. In customer psychology, the customer attempts to gather information about the product/service and makes a series of assumptions as to the quality and perceived value of the product which then leads them to make purchasing decisions.
For example;
Fans of Apple will tell you they are buying into the brand or the emotions attached to it but that’s not actually true. They bought an Apple because they assign the perceived value of their iPhone, iPad, or MacBook higher than that of a PC or Android device.
Why is Perceived Value Important?
1. Value drives sales. The main reason that perceived value is important is that people are more likely to buy from someone whom they perceive to offer good value and less likely to buy from someone whom they don’t feel offers good value. If someone doesn’t perceive your brand or product offers good value, they won’t buy from you no matter how great your offers are and how many of them you make.
2. Increases customer loyalty. If people perceive that your offers are valuable and worthwhile, they will keep coming back to you for more offers in the future. They will also tell their friends about you and recommend that they buy from you as well.
3. Increases conversion rates. You can increase the conversion rate by creating offers with a higher perceived value than others in the same niche. Offers with higher perceived value will perform better than those with lower perceived values, so concentrate on creating high perceived-value offers for your business.
4. Reduces buyer resistance: If you can create a great experience and exceed your customers’ expectations, you’ll reduce buyer resistance and increase your sales conversion rates.
5. Increases customer satisfaction: If you go above and beyond in terms of service or product quality, you’ll likely increase customer satisfaction which will lead to higher lifetime values from your customers.
6. It builds trust: There are many examples where a company increased its sales simply by increasing perceived value. A classic example is an experiment done by a New York restaurant in 1974. The restaurant was facing bankruptcy and so they decided to try something new – they offered their customers an expensive wine with their meals and asked them to pay whatever amount they thought the wine was worth. Surprisingly, this experiment allowed the restaurant to turn around its fortunes and increase its profits by 28%.
How to Increase Perceived Value
For Low-Ticket Items
Low-ticket items are often impulse buys. You see something you want to buy, and you don’t stop to think about it. You buy it without much consideration.
Create an irresistible offer
An irresistible offer (IO) is a compelling reason for someone to buy from you, right now. It’s such a compelling offer that it convinces them to ignore all the reasons why they shouldn’t buy from you and buy anyway. The best IO’s are ones that give customers something of perceived value that they can’t get anywhere else.
This could be a workbook, training video, cheat code, or other resources that helps them use your product more effectively or enjoyably. If you can give customers something tangible and valuable when they buy your low ticket item, they’ll feel like they’re getting more value than they expected.
When you’re selling a low-ticket item online, you’re up against two main obstacles:
First of all, people perceive the value of your product and its price to be lower than you expect.
Second, even if you can convince people that your product is worth more than they think (i.e. the value is higher), most will still pass on it because they see it as being “too cheap.”
That’s why creating an irresistible offer is so important. By creating irresistible offers for your low-ticket products, you can increase perceived value while still making sales at a lower cost per conversion. The result? Increased profits!
Use scarcity
Scarcity is a powerful tool to increase the perceived value of your products. It’s also a lever that you can use to increase the perceived value of lower ticket items. Using scarcity correctly can help you boost sales by increasing consumer interest and desire for your product.
That will allow you to charge higher prices for lower ticket items. It proves that more expensive isn’t always better and that cheaper doesn’t mean worthless. Scarcity can make a $5 item feel like a steal, but it can also make a $500 item feel like it’s worth every penny.
There are three ways you can use scarcity in your eCommerce store:
1. Limited quantities; Limited quantities create urgency and encourage buyers to act quickly before the item is gone forever. If your product already has limited quantities, clearly state how many are left or have remaining. If it’s a time-sensitive promotion or sale, show how much time remains on the deal so customers know exactly when the offer ends.
2. Limited availability; Limited availability is similar to limited quantity, but with one major difference: There’s no set number of items available beyond what has been sold. Limited availability gives consumers the feeling that they could miss out on something special if they don’t act now.
Showcase a celebrity endorser
There are hundreds of ways to describe your product, but if you’re selling a low ticket item say under $20, then it can be difficult to get your audience’s attention. The thing that will help make people notice your product on the page is a celebrity endorser.
Celebrity endorsements can be effective in that they confer status and perceived value. You are likely to pay twice as much for a product endorsed by a celebrity than one without an endorsement. Branding experts have long known that attaching a celebrity’s name to your product increases its perceived value and enhances sales. But the celebrity isn’t the only way to increase perceived value for low ticket items.
Truly, the connection between low-ticket items and celebrities may not be what you think. It’s not primarily about getting the brand on TV, but in social media, where consumers engage in two-way conversations with their favorite celebrities. That is where celebrities are paid to tweet directly back to their fans, who generate more sales for that brand. This is important because it suggests a marketing strategy for businesses seeking to use celebrities to promote their products online: get your brand involved in social media instead of TV ads so that you can increase your sales and revenue.
Celebrity endorsements also work because they invoke trust and familiarity, two factors that drive consumer perception of value. In fact, when you’re trying to sell an item at retail price or above, you should include some sort of reference to your celebrity endorser on the packaging, in advertising, or both.
Make your product look similar to high-end products
Whether you’re a one-man operation or an established eCommerce business with thousands of sales each month, it’s important to know how to increase perceived value for your products.
Ticket items are items that cost less than $100 are the bread and butter of any business, but they can be made to look more expensive in order to increase sales. Here’s a guide to making your low-ticket items look similar to high-end products using:
1. Color psychology (the color you choose can have a huge impact on how much someone is willing to pay for your product)
2. Product design (the box and packaging can make your product look much more expensive than it really is).
3. Typeface psychology (the font you choose can have a huge effect on how much someone is willing to spend on your product).
4. Creating an aesthetic that is in line with well-known brands. For example, if you’re selling headphones, you could create an aesthetic that looks very similar to Beats by Dre headphones.
Use social proof to build trust
The concept of social proof is a powerful marketing technique. It relies on people trusting the judgment of others instead of making their own decisions.
Social proof can be put to use when selling a low-ticket item (like a product or service) to increase your chances of converting the prospect into a customer.
Social proof is any evidence that helps make your case that what you’re selling is worth buying.
Signs that your prospects will believe include:
1. Testimonials from other people who are using your product.
2. References from experts in the field.
3. Positive reviews on authoritative review sites like Amazon and Yelp.
4. Awards or recognition for your product or service.
Communicate quality craftsmanship through storytelling
You’ve probably heard the old adage that “a picture is worth a thousand words.” Well, when it comes to marketing, that’s true – especially when it comes to selling your products.
A well-crafted story can help to increase perceived value for low-ticket items by communicating quality craftsmanship and/or design details.
An engaging story also helps to cultivate a deeper emotional connection with your customers and can be used as a way of differentiating your brand from competitors.
Let’s look at an example of how this works; You’re selling handmade wooden bowls on Etsy. Your bowls are beautiful, but they cost just $20 apiece. It’s important that you not only convince people to buy the bowl itself, but that it’s made out of quality materials, and that it’s designed in a way that makes it aesthetically pleasing.
How do you do this?
Using storytelling! A description like: “This bowl is made out of wood that has been hand-selected and hand-finished to ensure the highest possible quality,” immediately communicates the level of thought and care your business puts into its craftsmanship.
Use the power of comparison
Comparing two similar products can help you sell a lower-priced item. In fact, by comparing your product to a more expensive one, you can make customers feel like you’re offering a better deal.
Now, let’s say that instead of selling the $150 laptop, I’m selling the $150 laptop plus a $20 mouse. Why would anyone buy that? It seems like I’m trying to trick them into spending more money than they need to.
But what if I compared my $150 laptop and $20 mouse to the $400 laptop? Now it feels like I’m giving them a better deal. Even though the customer is spending less money than they would if they bought those two items at different times, they still feel like they’re getting a better price when they purchase them together.
This is a great way to increase perceived value for your products and increase sales. If you have some smaller items that you want to add to your main product in order to increase perceived value, try comparing them with a higher-priced item as opposed to other similar-priced products. You’ll be surprised at how well this strategy works!
Use emotional words that trigger the right emotional response
When you are selling low-ticket items, the actual price can be an issue for your customers. In order to get them to buy from you, you have to add perceived value. One way to do that is by adding emotional words that trigger an emotional response when your customer reads them. For example, you can use words like BEST, or LIMITED TIME OFFER.
You should use this strategy for limited-time offers or coupons with terms and conditions so that you will get the most out of it. For example, if you are offering a discount on your product and it is only available for a limited time then mention the deadline in your email. Just make sure that there is enough time for your recipients to take advantage of the offer.
Another way you can increase perceived value is by writing something like “Buy one and get 10% off on your next purchase”. This will make your customers feel good since they are saving money on their next purchase when they buy from you today. If you can come up with a great offer or coupon that includes emotional words and terms and conditions, you will be able to increase the perceived value and sales volume of your products.
Offer extended product warranties
Extended product warranties can be a great way to increase perceived value for low-ticket items as well as potentially make more money from your customers.
The idea of offering extended warranties is not new, in fact, most retailers do offer some form of extended warranty on their products now. But the problem is with the presentation of it, if you don’t present it correctly you’ll lose money. How many times have you been at the checkout and been asked if you’d like to buy an extended warranty for your product? I know I’ve said yes a couple of times only to forget about it later when I get home and find out that the price was quite a bit higher than I thought it would be.
But what if you could double or even triple that price and make more money? It’s a fact that people buy things far more when they feel they’re getting a good deal. So why not present your extended warranty in a way that makes it seem like something good rather than just another purchase? Why not make it seem like you’re giving them something by giving them the chance to purchase a product protection plan?
Choose eye-catching packaging
Low ticket items are the backbone of any successful business. The products that you offer must be appealing and desirable to your customers or they will not be interested in making a purchase. There are several steps you can take to make sure consumers see the value in your products.
Tailoring your packaging; The first step to increasing the perceived value of your low ticket items is to customize their packaging. By creating a custom package for your product, you are giving it an air of uniqueness that a less customized product does not have. When you buy something from a store, it is usually in a plain box with the brand name written on it. However, if you want people to notice your product and give it special attention, you have to go above and beyond this basic packaging.
Customize your packaging; There are many packages out there that can help you achieve the look and feel of premium packaging without having to pay for expensive custom boxes and bags. These products include things like tuck tops, tamper-proof sealers, and corner seals which all help create a polished appearance in order to increase perceived value. In addition to these product enhancements, you can also use customized stickers on your packages in order to brand them and increase consumer interest.
For Services
Increasing the perceived value of your services will bring you more sales.
How do you increase perceived value in a service-based business? Here is a quick guide to help you with that:
Make your service unique
The first thing to do is to make your service unique. If your service is so unique that there’s no competition, you’ll be able to charge whatever you want, because there’s no place else for consumers to go. However, if you’re in a competitive market and people can easily go elsewhere should they choose, you might have to lower your prices to match your competitors (while still maintaining an element of perceived value). One way to ensure that customers are willing to pay more for your service is making sure it is unique and not easily replaceable.
Create scarcity
Creating scarcity is one of the oldest marketing strategies in the book. It’s been used by businesses for thousands of years, and it works well for increasing perceived value as well. The main idea behind creating scarcity is that if a customer thinks that there are only a few opportunities available, they’re more likely to make a purchasing decision sooner rather than later.
Create an experience around your service
What’s the difference between going to a barber and getting your haircut from someone who owns their own barbershop? It’s not just that the owner does the haircut on their own premises. It is also about the experience. The client knows that she will be given a personal and friendly experience. She will be offered a drink, maybe some snacks and she will be able to chat with the other clients or even with the owner. All of these things add value to the service and they make customers perceive it as higher value than it really is. If you are offering a service, create an experience around it. Make it special for your clients and they will perceive it as better quality than if they were just doing it themselves or having it done by someone else without any care or attention.
Match costs to value
The most obvious way to increase perceived value is to raise prices, but this may not be an option if you want to maintain profitability. Instead of raising prices, look for areas where you can decrease costs while keeping quality high. Focus on reducing labor costs through increased efficiency and technology. Any savings can be passed on directly as a price break in exchange for customer loyalty.
Under-promise and over-deliver
This can be an effective way of increasing perceived value because customers tend to remember when businesses fail to meet expectations rather than when they exceed them. Limit your potential for failure by underpromising and overdelivering every time you make a promise.
Excellent customer service
A great customer service experience is one of the best ways to increase perceived value for your clients. When you have a friendly and professional staff that takes the time to get to know the clients’ preferences, their needs, and their concerns, clients will be more likely to feel satisfied with the work you do for them.
Timely communication
When you’re working with a client, it’s important to stay in touch so they know what’s going on throughout the process. If they don’t hear anything from you or your company, it can lead them to believe that no one cares about them or their project. Keep your client informed about where things stand or if there are any delays in the process.
Tell them how much they will save
Another way to increase the perceived value of your service is to tell your client how much money they are going to save by using your service instead of another competitor. If you are able to show that your service is better, cheaper, or faster than another competitor, then you will have increased their perceived value.
Offer extras
If you’re providing an unmeasured service — such as IT support — then consider throwing in some extra features for free. For example, if someone calls in with a PC problem, offer to back up their data for free and set up regular backups for them (and charge for this). This is effectively making your service more valuable by adding in extra features which may be worth more than the price tag attached to them when sold separately.
For High-Ticket Items
How do you make more sales when selling a higher ticket item? One of the best ways is to understand how to increase the perceived value of your high ticket items. Price often isn’t the deciding factor, it’s the perceived value.
The following tips will help you increase the perceived value of your high ticket products:
Create a limited edition and/or introductory offer
Create a limited edition item and make it available for a limited time. This can also apply to an introductory offer on a product that then increases in price after the introductory period.
Add exclusive extras
Give your customers incentives for purchasing your high ticket items. For instance, consider offering free gifts with purchase or discounts on accessories if someone buys your product.
Consider bundling other items
When you sell your product, consider selling it as part of a bundle with other products. You could also offer coupons for related products once someone purchases yours. This works particularly well if you are selling a more expensive product because people might be more willing to spend more on several items rather than just one really expensive item.
Increase brand recognition
If you have your own brand, try to build up as much brand recognition as possible by using social media, press releases, and other marketing strategies. This will give potential customers confidence in your brand, and they’ll perceive your products as higher quality because of it.
Present the high ticket item in a luxury setting
If you’re selling a $1000 pair of shoes, you should showcase it by placing it on a white background and adding some beautiful flowers in the background. This will add value to your product without increasing its price tag.
Have a story behind the item
Why was the item made? What problem does it solve? Who created it and why? What makes this particular item different than all of the rest? Why should someone buy this over any other similar products out there?
Showcase real customer testimonials (with pictures)
This will help build trust and credibility of your product as well as customer experience. You can also gain valuable insight on what you can do better or what they’d like to see in your product.
Showcase your expertise
Showcase your expertise relating to your product by giving facts about the product and its uses; tell success stories; and show yourself in action using the product so that potential customers see themselves using it, too!
Use unique branding
If you want customers to associate your brand with quality, make sure that’s emblazoned on every aspect of your company’s image. Include it in your advertising and marketing materials, website, business cards, and even staff uniforms.
Using samples
One of the easiest things you can do to help sell your high ticket items is to include samples of that item with your sales material. Samples are great for a number of reasons, First, they show potential buyers exactly what they’re getting for their money.
Second, by including a sample, you’re taking the risk out of the process for them. You could argue that anyone who doesn’t want or need the item won’t even buy it in the first place so why should you give them a sample but the bottom line is that people are more comfortable buying when they see what they’re getting.
For Subscription Services
Subscription services are a great model for monetizing your audience. They have a low barrier to entry, you don’t have to front the costs of creating a premium service, and you can charge consumers directly rather than having to go through an app store or websites such as Apple’s iTunes or Google Play.
Tons of apps and services like Netflix use the subscription model, but they also all share another thing in common: they provide perceived value to the user. Subscription services work when customers feel that they’re getting something valuable in exchange for their money and on top of that, they feel it’s worth paying every month.
Let’s break down how you can increase perceived value by looking at two different subscription models: one with a physical product and one with a digital product.
A. Digital Products
Having an amazing product page
It’s important to have a great product page if you have a subscription-based business.
A lot of customers will be interested in your product, but when it comes time to pull out the credit card, people are going to want a little reassurance that what they’re paying for is worth it. If they don’t get that reassurance on your product page, they might look elsewhere.
Treat your product page as an ad. You want to convince people that your product is worth every penny and every minute of their time. The best way to do this is with high-quality images and clear, concise descriptions of your product. You can also offer free bonuses, but make sure the bonuses are relevant to your offering.
Tiered pricing
Many subscription services offer tiered pricing to increase the perceived value of their product. Tiered pricing refers to creating different packages for customers at different price points.
Tiered pricing is particularly effective for digital products because it allows you to increase the perceived value while keeping the price the same.
Offer an introductory price
One of the most important aspects of pricing any product is to ensure that you’re maximizing perceived value. This can be a difficult balance to strike, but it’s essential for subscription services, especially when you’re new to the marketplace. Subscription services are often seen as having little perceived value for consumers since they provide access to something intangible.
While some subscription services may have no hard cost associated with them (such as website hosting or software), for many others, there’s still a tangible expense associated with each month of use. Offering an introductory price can be a great way to increase perceived value and encourage new subscribers.
The first step is finding the right price point for your subscription service. Here are three tips:
1. Introductory pricing should be lower than your regular price.
2. Make sure that you’ll still generate a profit after introducing an introductory price point.
3. Consider lowering your regular prices after the introductory period ends.
Offering an introductory price can be a great way to improve your conversion rates and encourage new subscribers, but it’s important that you set things up correctly so that you don’t end up losing money in the process. Take your time and make sure that your introductory offer is one that encourages conversions while ensuring long-term.
Use case studies
Case studies are a powerful method for increasing the perceived value of digital subscription services, particularly when you’re looking to increase retention.
Using case studies as part of your acquisition funnel can help you build trust with potential subscribers, increase your conversion rate and drive sales.
Case studies act as proof to your potential customers that they will receive the benefit they are looking for when they subscribe to your service. A case study should provide detailed information about who the company was serving, what problems the company was solving, how much value the customer received from using your service, and how the customer felt about their experience with you and your business.
Case studies are proven to increase sales for products within subscription services. This is because customers are able to see the value and benefits provided by a subscription before making a purchase decision. Case studies allow customers to be informed before making a purchase rather than after, which increases their chances of purchasing from your business.
Offer a great free trial
A great way to increase the perceived value of your subscription digital product is by offering a great free trial. Trial periods are a great way to entice customers into trying your product. This can be done in a variety of ways, but one of the most effective is by offering a fully functional free trial period.
The key to making this successful is ensuring that you have enough content in your product for users to be able to evaluate it properly during the trial period. Another key factor is making sure that there are no hurdles or barriers to getting started with your product during the trial period.
This might mean removing any payment information requirements, or it might mean providing enough free content within the first few pages of your website that someone can get started right away, even if they have never heard of your product before.
Provide creative payment options
The success of your product depends on how much-perceived value is given to the customer. A good way to do that is to provide various payment options. Subscriptions are becoming more and more popular in digital products like software and membership sites. The reason for this is simple: they’re convenient.
Rather than paying upfront, users can choose to pay monthly or annually, depending on how the payment method is set up. This has the benefit of allowing them to pay a certain amount each month rather than having to pay a lot at once. It is easier to increase the perceived value of your product if you provide multiple payment options.
If you only offer one option, there will only be one price for your product which could reduce the perceived value of it in the mind of potential subscribers because they may feel as though they aren’t getting as much as they should be for their money.
By offering different payment options, you can offer a better deal and build trust with customers by giving them a variety of choices.
Make the product mobile friendly
If you are planning on creating a digital product that can be delivered as a subscription, take the time to ensure that your product is mobile-friendly. Not taking the time to do so could cost you lost sales and potential subscribers.
There are many reasons why making your digital product mobile-friendly is important and here are two of the main reasons: First, it will make your product more attractive to potential subscribers.
A mobile-friendly digital product means that subscribers can access your digital product no matter where they are at any given moment. As a result, making your subscription product mobile-friendly gives it added value for subscribers because they can access it anywhere in the world using their smartphone or tablet.
For example, let’s say someone is traveling for business and wants to access a particular blog post from your site. If that blog post is not mobile-friendly, then this person will have to go through the trouble of accessing your site from their laptop or desktop computer while they’re on the road. If that same blog post was made mobile-friendly, then this person would be able to access it from their smartphone or tablet which is much more convenient for them.
Make sure you have a strong privacy policy to make customers feel secure with their data
If you are selling a subscription-based product, it is essential to have a strong privacy policy that clearly outlines how your customers’ data is used and protected. The perceived value of your product is directly impacted by the effect of the security of the information of your customer, so you need to make sure you do everything in your power to protect them.
B. Physical Products
Creating a great customer experience
If you’re selling a subscription product, then the value is built-in and you should be thinking about how you build customer value beyond the actual product.
Customer value is all about building loyalty, trust, and engagement with your subscribers. It’s about creating a great service that will make them feel like they are getting good value. This is especially important in the subscription space which can sometimes be perceived as “nickel & dime” or “all about the money”, but remember that your customers also want and need to feel valued.
Serialized delivery
If you sell subscription products, serialized delivery is an effective way to add perceived value and increase customer satisfaction. Treat your customers like gold. One of the greatest ways to do this is to provide them with a sense of exclusivity. Serialized delivery does just that, and it’s a great way to differentiate your business from the competition.
Here’s how it works: What is serialized delivery?
Serialized delivery is a form of product packaging that delivers products in installments, usually over time. It can be used for all sorts of products, such as gadgets, clothing, books, and more. Serialized delivery adds excitement and encourages customers to come back for more. Serialized delivery can also be used as a way to get your customers to start using your product earlier than planned by releasing segments of content (a book) or features (gadgets) at different times.
Serialized delivery works best when you have multiple items in a collection or subscription and they’re delivered at different times, allowing the customer to feel like they’re getting something special and unique.
Product diversity
Selling a subscription for a one-off price is less complicated than selling a product with an ongoing cost. However, you can still improve the perceived value of your subscription by using different products each month. The key to this strategy is product diversity.
When you subscribe to a service, you don’t know how much money things will cost over the year, but you do know that every month will be different. For example, you might get a book one month and some socks the next.
Offer free shipping and handling
Free shipping and handling on a subscription product are one of the best marketing tools you can use to increase the perceived value for your customers.
Setting up free shipping and handling a subscription product is not always easy. Depending on the size or weight of your products, you might need a fulfillment center or even a third-party vendor to help you get it done. Either way, it’s worth it!
Offer volume discounts
Using volume discounts to increase perceived value for subscription products is a great way to improve your subscription business. Tons of companies use volume discounts as a way to sell more. But it’s usually a very simple and straightforward process.
The thing about it is, people don’t like to feel like they’re being “taken advantage of.” So if you offer a large discount on the first product, many people will feel like they are being forced into buying additional items – because that’s the only way they can get the discount.
If you want to offer volume discounts, you need to make sure that your customers feel like getting multiple products is an added bonus – and not something they are forced into doing in order to get the discount.
For example, let’s say that your pricing is set up in this way (all prices are before any fees):
- $9 – 1 item/month
- $6 – $30 / 3 month subscription
- $5 – $60 / 6 month subscription
- $4 – $90 / 12 month subscription
Your potential customer is going to look at this and think: “I can get the lowest price by signing up for the 3-month subscription.
Final Thoughts
There’s no one single way to increase the perceived value of an offer/product. There is a multitude of factors that go into it and you have to evaluate each individual scenario on a case-by-case basis.
However, you can use some of the tactics we’ve outlined above to create a broader strategy for increasing your offers’ perceived value without breaking the bank in the process. We hope you found this article helpful, and that it helped you use your offers’ perceived value to increase your conversion rates.
