How does need, price and belief play into your customers' perception of value?by
There is one key factor that leads a potential customer to make a purchase decision: value.
And customer-focused professionals are in a unique position to ensure that the customer gets what they need to make that decision.
Value is a subjective perception created through a blend of need, price and the belief that one product is better than another. A product or service described as ‘good value’ is seen as a high quality solution which meets all of a customer’s needs at a reasonable price. Value breaks down as follows:
I may see a pair of hiking boots on special offer, and I may recognise the brand as a market leader, but the fact that I don’t go hiking or have any other need for the boots means that I won’t value them that highly. However, if before I had seen the boots, I had read an article explaining how hiking boots improved posture, helped stimulate blood flow and were good for your feet, then by the time I saw the boots I may have developed a ‘need’ for them.
Nurturing potential customers by providing this kind of information is an excellent way of enhancing the perceived value for your product or service and can help you break into new markets.
Always set your price point as high as you can (assuming you aren’t targeting the budget end, of course). This enhances the perceived value of your product.
Why do people buy branded products over supermarkets’ own brands, despite a huge price jump? Because they reason (rightly or wrongly) that superior products cost more to create.
Slashing prices works best when it comes to exclusive discounts (voucher for loyal customers or an introductory offer, for example), but regularly offering a huge discount lowers the perceived value. For example, who is going to pay ‘full price’ for a sofa at DFS when most of the year they are offering 50% off? Their sofas are now only ever going to be valued at half the ticket price.
Belief in product
The price point will often lead customers to believe one product is better than another. However, people will not be willing to pay a higher price point if they do not believe in the product.
Belief is about your brand, your marketing of the features of your product, and the customers' knowledge of the product range. It is what 80% of your marketing budget goes in to creating. And it is also the one area in which you have the most control.
How to create belief in your product
So how do you go about creating this belief in your product or service? Is there a single best method, or does it depend on the item or service you are selling? Does it matter whether you are selling B2C or B2B?
While there may not be a single method of developing belief in your product, there is a core concept. It rests on the old Chinese proverb: “Tell me and I’ll forget, show me and I’ll remember, involve me and I will understand.”
1) Tell me
Let me be clear, ‘telling’ is still an important step. Yes, people will likely forget the specifics, they may even forget your brand, but they will be primed to receive your brand, product and service, and this priming can be important in establishing credibility.
For example, you may conduct a PR campaign where you write thought-provoking articles relating to your product or service. In the article you describe the problem (establish a need), drop some hints as to a solution (brand priming) and get it featured in an established trade magazine (credibility).
2) Show me
The visual memory is more powerful for most people than the purely verbal memory, particularly when ‘show me’ still involves some verbal explanation; some ‘show and tell’, if you will.
The efficacy of showing off your product or service is demonstrable by the continuing popularity of exhibitions and trade shows. While many thought that the digital revolution would lead to live events all but dying out, almost the opposite has happened.
3) Involve me
‘Involving’ your prospect creates an experience that utilises all three types of memory/learning: verbal, visual and kinesthetic (touching and using) to create an almost unbreakable belief in your product. If you are there to tell the prospect the benefits of the product or service, you can create a need for certain features. At the same time you show how the product or service meets those needs visually. Then, the final step, you let the prospect have a play with the product or service, get them involved in using it and create an experience.
When we focus on the customer experience and create a complete and immersive experience of the product or service we help that person to remember the product/service. We generate belief in the product and this turns prospective customers into brand ambassadors. You're not as likely to share the fact that you saw some new product, but you will want to tell people what you just tried out - experiences are made to be shared.
So, as customer-focused professional, you are already in a great position to help customers understand the value of your product or service. And by focusing on that value creation you can turn prospects into buyers and even ambassadors.
Richard Edwards is the director of Quatreus, specialising in creating face to face experiences that strengthen relationships and improve communication – for both internal and external audiences.
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