- Perceived value is how a customer evaluates a product or service based on how it meets their needs or expectations
- Price, convenience, credibility, and other factors will influence a customer’s perceived value
- Perceived value should play a role in your pricing and marketing strategies
Whenever a customer buys a product or agrees to a service, they have a certain expectation of how well the purchase will address their needs. This perceived value takes numerous factors into consideration and influences whether a buyer becomes a loyal customer or decides to try a competitor when they next purchase the product or service.
What influences a customer’s perceived value
Broadly speaking, perceived value is how a customer evaluates a product or service based on how well it meets their needs and expectations. The perceived value is often influenced by how the product or service compares to a competitor as well. It is closely associated with a company’s value proposition, which addresses how a company can fill a market need or offer an existing product or service with a lower price, better convenience, or other benefits.
Factors that influence a customer’s perceived value include:
- A brand’s credibility or reputation
- How well the product or service fulfills the promises made by the company
- Any other advantages the product or services offers, such as environmental sustainability or support for a local business
How does perceived value affect pricing?
Customers are willing to pay a certain price for the perceived value a product or service offers. If they perceive that it has a higher value, they’ll be willing to pay more.
While some companies can improve their perceived value by offering a product or serviceat a lower price, others can charge more than their competitors by demonstrating that it they offer more convenience, better reliability, or other benefits. Customers are also more likely to pay a higher price when a company has good credibility, and business owners can emphasize this quality through strategies such as free trials or customer testimonials.
How does perceived value affect marketing?
A customer’s perceived value is influenced by certain qualities of a product or service, and highlighting these qualities in your marketing effort can help you retain existing customers and broaden your customer base. Using these marketing messages allows you to amplify the qualities you feel will be most valuable to customers and where your company can offer the best advantage over competitors.
Don’t assume you know what your customers want. Market research, such as surveys and focus groups, will help you determine what’s most important to your target audience and how you can adapt your marketing efforts.