| If you want to get paid, you must add value to the world in one way or another.
If you want to get paid really well… you must also communicate the value you’ve created effectively - by creating perceived value.
It’s the most important part… because perceived value is arguably way more important than the real value (there are even studies that show we get more pleasure from higher priced goods just because they cost more, not that they’re functionally different).
So manipulating perceived value in an ethical way is a critical skill that you must master as a marketer.
But first, let’s look at two major ways people get this wrong.
The first is… in the online marketing world, the term perceived value basically means…
“Let’s see by how much I can inflate the price of my product and still get away with it.”
And then they go and do stuff that some people might call cheesy… like assigning their bonus PDF a $3,999 value. By the way...
I have no problem with people charging what they can get. If the numbers work on their end, it means they must be doing something right.
However, if you’re starting out, it might not be the best strategy, simply because you lack any credibility.
Instead, let’s take a broader view.
The textbook definition of perceived value is basically “the customer's evaluation of the merits of a product or service and its ability to meet their expectations”.
Pretty fancy, right?
Now, a specific example would be a customer buying a drill because they perceive that the drill is going to help them hang that painting on the wall that their spouse has been bugging them about for 6 months and 17 days, and they’ll make their spouse happy. That’s perceived value.
Would you agree that the perceived value of a happy spouse is much higher than the drill itself?
(By the way, the original maxim goes “sell the hole in the wall, not the drill”… Like anyone really wants a hole in the wall. I digress…)
Perceived value can take on many different forms.
For you, as a marketer, it simply means if they slam the door in your face, crawl in through the window. Meaning, if you can’t make a case that your product is worth a huge amount of dollars, make a case that it’ll make someone’s spouse happy.
Look at the function - what can your customers achieve with your product or service? What are the features? What’s the visual appeal? Usability? Packaging? And so on. Most importantly… how does that connect to the true needs of your customer?
So the second way I’ve seen people mess up the perceived value part of their products is simply by thinking that in order to be able to charge more than their competitors, they must come up with a huge, ground-shattering improvement.
Not so.
Just look at how Google is improving their search engine. On the surface, it’s the same thing it was 5 or 10 years ago. Under the hood? They’ve made 3,234 updates in 2018 alone. In May 2020, they announced yet another huge core algorithm update - and undoubtedly they’re keeping the steady pulse of smaller updates going, too!
Now, your situation is obviously different.
However, if you keep adding small improvements to your product or service geared towards being able to create more perceived (and real) value to your customer…
You, my friend, will be on your way to the big leagues.
To Your Success, Paul Hanson
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