When fast-fashion retailers are offering every style, size and colour for less than a penny, it is hard to comprehend why anyone would spend up to £90 (if not more) on a single T-shirt when it costs only £12 - £17.
How can a store sell one for £90 and have them sold out? It is simply a matter of managing customer perception. Also, learning the best way to position yourself with a unique selling proposition (USP) can be the difference between blending in and making that sale.
This is what you will find in this article.
#1. What is customer perceived value?
A customer's perceived value is determined by what they get out of your product versus what they must pay.
Consumers generally run the customer perceived value formula (pictured below) before making a purchase in order to determine if what they will receive is worth what they must pay.
Customer Perceived Value = Total Perceived Benefits – Total Perceived Costs.
Houston Chronicle explains customer perceived value as:
“Customer perceived value is the notion that the success of a product or service is largely based on whether customers believe it can satisfy their wants and needs. In other words, when a company develops its brand, and markets its products, customers ultimately determine how to interpret and react to marketing messages".
#2. Ways you can increase your customer perceived value.
As a retailer, what can you do to increase customer perception of value?
Your customer perception of value can be increased in a number of ways. However, finding out how to make your product match with the consumers' perception of value is the key to success. Therefore, you must ask yourself in the first place: What value would appeal to my customers?
Learn what your customers truly perceive as the value in your products by studying them closely. Providing a free lipstick along with the purchase of a pair of boxers is pointless if your customers are men.
It's important to understand that price is a two-sided concept, creating both positive and negative feelings in the minds of consumers. A high chance of purchase occurs if the positive feeling it creates is dominant over any negative elements.
#3. Customer perceived value example.
The following are a few examples of value benefits in action.
1. Offer a free product/service benefit.
Offering your consumers a free product or service, as well as the product they're already considering buying, will let them see that their purchase has an overall greater benefit than it otherwise would if a single item had been included.
The customer perceived value outcome: Now the customer feels that the purchase represents a chance to obtain something for free. By now, it is more justified for the customer to pay the price he has to pay based on the value that he gets (2 for 1).
2. Offer a physical & practical benefit.
Let's use this awesome backpack from Rains.
This bag is waterproof, durable, comfortable and spacious, so it makes a great everyday bag to take on the go.
The customer perceived value outcome: Despite the bag's high price, the customer perceives it as an investment piece that will last him a lifetime. There's a lot more to this bag than meets the eye. He can now imagine using the bag every day. An essential for carrying and protecting all his treasured possessions.
3. Offer logical benefits.
The difference between logical benefits and practical benefits is that practical benefits provide actual value, while logical benefits focus more on the "yeah, that seems reasonable" type of characteristics.
In the case of the above Rain's bag, the customer understands that it would be sensible to purchase it since it will prevent his belongings from getting wet. Because the bag offers him a feature he wants and needs, there is perceived value.
4. Offer emotional benefits.
It's these benefits that make your customers come back for more. Consider the satisfaction of using a premium product - that definitely increases the perceived value of the product. Custom products are especially trendy right now, and customization is a great tool for emotional benefit.
Particularly among the younger generations, custom-made products are valued. According to a study by Thomson Reuters, a whopping 92% of 20-30-year-old millennials, reported being happy in paying a premium for apparel that was custom-made products.
The customer perceived value outcome: The customer is offered a unique experience, with the option to make his own garment, exactly the way he wants it. Purchasing this jacket is now more than just a new jacket. It is a personal item that the guy will treasure and wear with pride. Made by him for just him.
As a result, they are usually difficult to find, as most high-street or small retailers have pretty much the same choice of brands and sizes.
If you're looking for ways to enhance your store's perceived value, don't forget to keep personalization at the top of your list. As a result, your customers will have a completely unique experience. RJ MTM offers exactly just that. Brands can adjust or tailor in-store products to their customers' preferences with an in-store system that's easy to use but powerful with results. Customers can make exactly what they want for the price of existing RTW, an experience they will never forget.
Don't forget, the product isn't everything. Customers may also consider purchasing a product if it was sustainably made or if part of the profits went to a non-profit. Customer perceived credibility is also influenced by locality as people want to support their own communities
Now that you know a little about perceived value, let me summarize some of its highlights for you.
Product: Providing emotional benefits for your customers will keep them coming back.
Price: The more the product is valued, the higher it can be priced.
Convenience: Make customers' interactions with your business as straightforward as possible. This means to offer your customers the information they are seeking, including clear reasons why your product is a fantastic option for them. Customers don't want to waste time researching, so make it easy for them by providing them with everything they need to know about the product. Train your employees to communicate this knowledge clearly.
The easier it is for customers to find what they want at your store, the more likely they are to come back. The more customers who return to your business, the greater the sales and the greater the brand recognition.
Last but not least, customers will always compare your offerings with your competitors, so make sure you offer the best value you can. (P.S. Value ≠ Lowest Price)
If you found this article useful, make sure you give it a thumbs up so that I know what type of content you like. Also, if there are topics you like me to cover in the next article, let me know in the comment box below.
I hope you found this article helpful. Thank you so much for reading
Until next time,
Camilla
Comments