Value is a lot like beauty: it’s all in the eye of the beholder. If you sell a hard good or offer a service, you can do a lot to create the impression of value and justify the price you’re charging. While it might take a slightly larger investment on the front end, creating the perception of value is one of the most successful strategies for improving margins and building customer loyalty. What small business owner in today’s troubled economy doesn’t find that appealing and downright essential?
Whether your customers are businesses or consumers, the current economic climate is motivating them to seek value to justify their purchase decisions. It’s also important to remember that value is a psychological phenomenon: the right attributes combined with the right price can create a powerful “perception of value” that will still drive significant margins for your business, no matter what you sell. Customers don’t need to see the mechanics of what it costs you to deliver a product or service; they just need to be convinced that the money they are spending is a good investment.
So how do you go about creating the perception of value? Let’s consider two different approaches: one for hard goods or products, and one for more intangible service-based offerings.
Hard Goods: Creating the Value Perception
If you’re running an Internet business that features a product catalogue, don’t make the mistake of thinking that photographs and product specifications are secondary. Just take a look at how the major online retailers are using enhanced zoom and sizing options to enable the buyer to really get a close-up, 360° view of what they are buying.
While you might not be able to afford imaging technology that sophisticated, it’s essential that photographs of your products are attractive, clear and professional. Nothing cheapens the look of a product like bad lighting and amateur photography (even luxury items). Even a lower-end item can look infinitely more valuable when it’s photographed well. When it comes to product descriptions it’s vital to emphasize distinguishing features using emotive language. Think of terms like “imported”, “hand-crafted”, “top-grade materials”, “limited edition”, “custom”, “one-of-a-kind”, “unique” and “special edition” – these all create the impression of distinction and good value for money.
Tips:
- Invest in higher end catalogue product shots where possible
- Compare your products to comparable luxury items offered at a much higher price point
- Include customer testimonials that support high value (including online ratings and reviews if possible)
- Take time to get product descriptions right and consider investing in a copywriter to tap into more emotional buying triggers and value statements
Service Offerings: Creating the Value Perception
Value is a more challenging concept when it comes to a service-based offering. In this case, you’re relying almost entirely on meaningful content to communicate the perception of value. Prospects who buy services have a much different criteria set and tend to be more practically driven: they want to know they are getting a robust service package for the money and that they will be well-supported by their providers. These buyers also tend to do more diligence than buyers of packaged goods, and they typically focus more on the lifetime value of the service they are purchasing. This is especially true if a contract is involved (think cell phone plans, gym memberships, etc.) that commits them to paying a fixed or variable rate each month.
Given the different purchasing criteria, creating a strong service-based value perception needs to be based on objective, measurable benefits. For example, how does your service compare to a competitive service? Does the support you offer meet or exceed the industry standard? Do you offer any additional incentives? Can you offer an open-ended contract that gives the buyer more flexibility? In this type of online sale, value perceptions are almost entirely driven by clear benefit messaging.
Tips:
- Keep benefits focused and objective – include objective data to support your claims whenever possible
- Think about key terms like “Return on Investment” and “Lifetime Value” – buyers (especially business buyers) are more savvy than ever about the actual cost of ownership and not just the sticker price for your service
- Service offers benefit greatly from competitive comparisons, so make an effort to clearly demonstrate your service advantages up front
- Service value is enhanced by the perception of choice and flexibility; where you can, ensure you give your buyers service options that give them the option to easily upgrade or downgrade service levels
Creating value perceptions can take insight into your customers’ buying preferences and sometimes a bigger up-front investment, but in the end your online business will reap the rewards.