In marketing, Customer Perceived Value is the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those competing offers.
What is customer perceived value?
Customer perceived value is a marketing term that refers to the way a consumer views a product. This term attributes the success of a product or service to the perceived value consumers assign to it.
Customer perceived value assumes that each customer evaluates their purchases to determine if they meet their wants or needs, then they compare that evaluation to the price they’re paying. Sometimes, pricing can also affect perceived value.
- Perceived value is a customer’s own perception of a product or service’s merit or desirability to them, especially in comparison to a competitor’s product.
- Perceived value is measured by the price the public is willing to pay for a good or service.
- The marketing of a product or service involves attempting to influence and increase its perceived value, which can emphasize qualities such as its aesthetic design, accessibility, or convenience.
Importance of customer perceived value
Customer perceived value is important because marketing professionals can use the idea to predict how a consumer may view a product.
When the perceived value of an item increases, the business or company can price it higher or sell more units, both of which result in higher profits.
This means that marketing professionals try to increase the perceived value of goods and services by determining what their customers value most. To do this, they perform market research such as data collection, trials, and surveys.
Relationship between Customer Perceived Value and Customer Satisfaction
Customer satisfaction is directly linked to customer value perception because the value is in the mind of the customer not based on what a brand tells the customer is valuable.
If what the customer perceives as value is rewarded by confirming their perception and potentially offering value beyond their expectations, this results in customer satisfaction that can lead to customer loyalty.
Loyal customers contribute to word-of-mouth marketing through personal recommendations and online ratings and testimonials on social media (known as earned marketing) which bolster regular marketing campaigns significantly.
Why Improve Customer Perceived Value?
When shoppers consider your brand and its products valuable and beneficial, you’ll score a ton of positive perks, such as:
More conversions. Convincing shoppers that you’re the right fit means you’ll make more sales.
Better customer reviews. Giving customers an accurate description of your products, outlining how they’ll benefit from them, and delivering on your promises lead to happier customers. Satisfied customers then leave glowing reviews that give people new to your brand the confidence to also buy from you.
More referrals. Happy customers love recommending your brand or products to everyone they know. You’ll soon become the go-to brand people can’t stop talking about. Now you’ll expand your customer base without increasing your customer acquisition costs.
So as you can see, a higher customer perceived value makes it way easier to grow your brand and, ultimately, costs less for you to do so. That’s why improving your CPV is worth your time and attention as a marketer or business owner.
Way to Increase Customer Perceived Value
Use these six proven strategies, and you’ll have no trouble boosting your product’s perceived value and accelerating your brand’s growth:
1. Focus on Your Time-Saving Attributes
American entrepreneur, author, and motivational speaker Jim Rohn once said:
“Time is more valuable than money. You can get more money, but you cannot get more time.”
With everyone’s busy lives and fast-paced schedules, it often feels like there isn’t enough time in the day to accomplish everything we want. That’s why so many shoppers search for products that save time or offer a convenience they can’t find anywhere else.
So the more you can highlight your product’s time-saving features, the higher your CPV will be.
Think about the best ways your product gives customers more time in their day. Does it cut out a time-consuming step? Is it more efficient than comparable products on the market? What’s the convenience factor?
Make sure these key features are visible throughout your branding and messaging. Then promote them as often as possible.
2. Emphasize “Feel Good” Attributes
Remember how we said shoppers evaluate brands and products on an emotional level? How people feel when they think about, buy from, and talk about your brand plays a huge role in their decision to do so.
Knowing this, try to foster an emotional connection with your customers based on your brand’s:
- Mission, vision and values
- Quality and craftsmanship
- Environment-friendly perks
- Charitable outreach
- Accessibility and ease of use
Spend some time elaborating on these distinguishable features, and you’ll let customers get to know and respect your brand. The more aligned they are, the higher your CPV will be.
3. Build Your Brand’s Reputation and Credibility
The next task to tackle is improving your brand’s perception.
Even if you craft the best product — with every possible feature customers want — you’ll have a hard time attracting customers and closing sales if your brand isn’t seen as trustworthy and credible.
There are three easy ways to boost your brand’s reputation and credibility:
- Use testimonials from customers throughout your brand messages, website, product pages, and social media channels. Start collecting reviews and displaying these to instantly build trust with people new to your brand. We’ll talk more about this later.
- Show off customer reviews featuring user-generated content (UGC), which are images or videos customers create about your brand and its products. Once shoppers see that other people have used your products and loved the experience, they’ll be more likely to trust your brand and make a purchase too.
- Partner with trustworthy brands or influencers with similar values. If your audience is already familiar with and trusts these brands, partnering with them will boost your brand’s credibility as a result.
These three steps will encourage shoppers to trust your brand. And brands with outstanding reputations often have a sky-high CPV.
4. Use Testimonials Throughout Your Site
Like we mentioned earlier, collecting and displaying customer reviews is one of the best tactics to improve your customer perceived value, which is why we’re elaborating more on it in this section.
Instead of boasting about how great your product is, you can let your existing customers do the talking and heavy lifting for you. Allow them to share their thoughts and honest opinions, and you’ll have a marketing machine your shoppers can actually relate to.
Shoppers often believe feedback from real customers is much more reliable than anything you could write on your website. As a result, reviews and testimonials build trust for new customers.
Reviews might even mention a perk you haven’t ever advertised yet appeals to your target audience. After all, who better to address pain points felt by your audience than the very customers you’re targeting?
Once shoppers see that other people love your brand and find it valuable, they’ll also view it as valuable. You’ll automatically boost your CPV and increase the likelihood of shoppers buying from you.
5. Offer Intent-Based Promotions
One thing that lowers your perceived value is throwing generic discounts at new customers.
For starters, it becomes the anchor price for which customers expect to pay now and into the future, which makes it difficult to command full price later on.
Customers may also view your brand as the cheaper alternative and only turn to it if it fits that bill. Otherwise, they’ll find another brand that does.
To get around this and improve your customer perceived value simultaneously, it pays to get smart about the promotions you use and become more strategic with them.
You can achieve this by only offering incentives to shoppers that need them to complete their purchases, to only offering the minimum promotion required to convert each individual shopper, based on their customer intent.
Rather than training your visitors to expect a discount to convert, and devaluing your products, leveraging Intent-Based Promotions helps to avoid degrading your customer perceived value by not providing discounts to those who either would convert without one or had no intention to purchase in the first place.