Increase Perceived Value
One of dozens of strategies listed and linked to here:
How to Make More Money
From Your Business
By Steve Gillman
What you can get for a product or service depends on the perceived
value--what a potential customer thinks it is worth. One great
way to either boost sales then, or to increase prices to boost
profits more directly, is to enhance the perception of value.
There are a number of ways you can do that.
To start with there are the "tricks" that many marketers
will encourage. For example, studies in behavioral economics
show that people perceive the value of something as higher when
there are even more expensive items in close proximity.
Suppose you have three microwave ovens in your appliance store,
priced at $45, $56 and $82. If you want to increase the perceived
value of the $82 ones and so sell more of them, you can simply
place a new model that costs $124 next to it. Experiments have
shown that this little trick works pretty consistently to increase
sales, making it worthwhile even if you never sold one of the
$124 microwaves.
Price alone can influence perceived value. I once read about
company that wanted to increase sales of a relatively cheap brand
of liquor they produced. By simply doubling the price they increased
the perceived value in the eyes of shoppers, and sales went up
100%. You can imagine what happens to profits when you double
the price and double sales at the same time.
But you don't have to resort to tricks that are more purely
psychological. You can also increase the perceived value of your
product or service by actually offering more value. In a restaurant
this might mean using higher-quality foods or improving the dining
environment. With furniture sales it could mean including delivery
and set-up.
When looking for ways to change the customer perception of
value, break down your business into its various components.
Then ask of each, "How can I change this to make the customer
see it as higher-quality or indicative of more value?" For
example, a dog-sitter could look at his business card and realize
that getting certified (there are organizations that do this)
and noting that certification on the cards and in advertising
will make him appear to be more professional. Looking at the
scraps of paper he has notes on he might decide to use his computer
to print out simple forms for customers to fill out with special
instructions, the phone number and address of their veterinarian,
etc.
There are two goals you might have when you increase perceived
value. One is to simply increase sales. The other is to justify
a higher price. Accomplishing both is also possible.
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