Increasing your product's perceived value

Value for the price paid is critical for customer satisfaction and loyalty. According to KPMG International, it’s the second most influential factor after product quality when making purchase decisions. This means consumers are heavily weighing up what they get for their hard-earned dollars.

In this guide, we’ll explore what value for the price really means to customers, how to shape those perceptions, and proven tactics to increase it. With the right strategies, you can deliver experiences that align with buyer expectations around worth and cost.

Defining "value for the price"

Value represents a customer’s perception of what they receive compared to what they pay. It goes beyond just the physical product or service to encompass the full experience and relationship.

Levers that shape perceptions include:

• Product quality, features and uniqueness
• Convenience, availability and accessibility
• Support, service and problem resolution
• Brand strength, trust and alignment
• Loyalty rewards and personalized perks
• Status, prestige and social signaling

If the benefits outweigh the costs, you have positive value. When the scales tip the other direction, value diminishes along with satisfaction.

Assess your positioning

How do your customers currently perceive the value you deliver? Here are ways to find out:

• Directly survey customers on their value impressions across purchase journey touchpoints.
• Review feedback and interactions for clues into pain points or value gaps.
• Audit where you might be over or under-delivering on potential value based on the category and competitive landscape.
• Analyze churn metrics and exit surveys to identify value-related deficiencies leading to cancellations.
• Talk to sales and customer service teams who interact with customers daily for real-time insights.

Why grow your perceived value? To increase your price

Value-based pricing, also known as price-to-value pricing, is a strategy that involves setting prices based on the perceived value of a product or service to customers, rather than basing pricing solely on the cost to produce the offering + markup. The goal is to capture the value that customers receive, rather than basing prices on competitors or production expenses.

Implementing value-based pricing involves researching customers' needs and quantifying the benefits they receive from using the product. Companies then set prices according to the value proposition offered. This pricing model requires understanding target customers deeply and continually adapting pricing based on market research.

1. Quantify the value clients receive through metrics like time or money saved, problems solved, and outcomes achieved.
2. Use market research and willingness-to-pay studies to understand what potential price maximizes value.
3. Then set prices that are aligned to this data and tries to maximize the willingness to pay.

Examples include Apple iPhones and Yeezys. The price to product them are a fraction of the price that people are willing to pay to use a popular product.

Iterate on your pricing strategy

Consistently improving your product's perceived value enables you to evolve your pricing along with the market.

Alternatives to value-based pricing include cost-based pricing (setting prices based on costs plus a markup), competitor benchmarking, premium/luxury pricing, penetration pricing, bundle pricing, and more. But value-based pricing establishes an advantage by anchoring directly to buyer value – which you can control and improve.

Strategies to enhance value

Here are powerful tactics to shape positive value perceptions and boost satisfaction:

1. Elevate quality. Obsess over product performance, longevity, and flawless operation. Quality reassures customers they made the right purchase.
2. Streamline processes and access. Identify and eliminate friction in the purchase journey, onboarding, or setup. Make it easy and enjoyable to obtain and use your offerings.
3. Respond rapidly. Be available to answer questions and resolve issues quickly and effectively. Responsiveness increases reliance on your support.
4. Surprise! Look for opportunities to present customers with unexpected delights. It might be a related discount on a complementary product, bonus gift, or special treatment. Small gestures go a long way.
5. Reward loyalty. It's so easy to make customers feel valued for their continued business with a coupon or deal.
6. Personalize experiences. Use data and insights to tailor interactions and content to individual needs. Personalization shows you understand customers.
7. Reinforce messaging about value. Consistently communicate the tangible and intangible ways you deliver value before, during, and after the sale. Repetition is key.

Taking even small actions across these areas can compound to positively shape buyer value perceptions.

Add value with perks

Integrating savings and benefits into the entire customer journey is like applying WD40 to your customer experience.

• Easy savings keep customers engaged. Offer free shipping, discounts, early access, and other tangible rewards based on tenure and activity.
• Layer on delights like surprise upgrades and complimentary services.
• Consider VIP tiers with escalating benefits to incentivize growth in usage and spend.
• Partnerships multiply value. Feature local partners to bundle deals and perks like free coffee or movie tickets.
• Friction kills perk utility. Make it easy to qualify and redeem offers through visible tracking and instant access. ‍
• Don’t make customers hunt for value. Show benefits prominently in communications and account portals. ‍
• Refine over time. Analyze program performance and listen to user feedback.

A well-executed perks program taps into our human love of feeling valued and rewarded.

Alignment determines the outcome

As the famous saying goes: “Value is what you get. Price is what you pay.” Keeping value and price perceptions aligned is crucial for satisfied buyers and profitable businesses. Use this guide to assess your value positioning and implement tactics like perks programs to exceed customer expectations. Deliver on your promises – and over-deliver when you can.

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