The idiom “One man’s trash is another man’s treasure”, though often misused is purely based on the concept of perceived value. Actual value is practical, objective and cannot manipulated easily to help you stand out. However, the beauty of perceived value is that it is very subjective and leaves a lot to interpretation. Keeping in mind that perception is influenced by various factors that are very subjective and specific to each individual. It is possible for brands to alter product perception.
Ever notice how expensive ‘premium’ products are? Sure you have, but somehow, we rarely see the terms ‘premium’ and ‘expensive’ put together. Usually, when something is viewed as ‘premium’, we automatically associate it with quality, status, even expertise. Then we’ll rationalize the added expense as the cost for getting this extra value as opposed to the cheaper alternatives.
Perceived value is “A customer’s opinion of a product’s value to him or her. It may have little or nothing to do with the product’s market price, and depends on the product’s ability to satisfy his or her needs or requirements.”- Business Dictionary
In his TED Talk, Perspective is everything, Rory Sutherland mentions that things are not what they are, they (things) are in fact what YOU think they are. All the same, it is impossible to sell a product one day at ksh400 and ksh1500 the next day. This will only put off your current customers.
So, what’s the science behind increasing value perception without increasing your objective costs? Try out these proven techniques:
Narrow your target audience
There is nothing wrong with having an affordable product. However, if you plan to make it premium you’ll need to segment your target audience by factors such as: age, gender, location, marital status, hobbies, and beliefs. By doing this, it allows you to truly understand your customer needs and wants. It also helps you evaluate whether and how you can match the perceived value you desire. Also, focus on the value your products offer in terms of quality.
Have limited quantity
If everyone can have your product whenever they want it, people don’t perceive it as rare. Think about Ferrari, they are masters at producing limited quantities of their cars only available to a select few around the world. Do this with a product that is in high demand, otherwise, this strategy won’t make much of a difference. Another bonus is that limiting the quantity plays on the customer’s fear of missing out. (More on that here.)
Limit their Options
Research shows that when people are given too many choices, they tend to become confused, indecisive and less likely to make a purchase. This also means that the likelihood of them experiencing buyer’s remorse increases, and you don’t want customers to second guess their decision about buying your product.
With the Kenyan brand Pace Africa, you’ll only have three options to pick from their flagship products. These are: Pace Flexx, Pace Mate, and Pace Focus. All three have a crisp sound quality that matches up to international standards. However, their decision to limit the choices is not from a lack of imagination. Rather, the limited options reduce the length of time a customer spends deciding to buy their product. This is useful because it reduces the chances of a customer backing out of the sale completely. Plus, it creates the perception of high-quality gadgets at the best value.
Increase the price but don’t offer discounts
We automatically think that a brand has something better to offer in terms of its value when the price is slightly higher than that of its competitors. Remember, the goal is to narrow your target audience to those who can afford your product at the current price. If you want to pass your product as luxurious, then this should be part of your brand strategy. Besides, offering discounts, sales, promotions or freebies only lowers your products perceived value!
Take B-Club for example, one of the biggest night clubs in Kenya. They don’t compromise on their premium services and all sorts of celebrities, politicians, businessmen, and women are willing to pay for the cost of this luxury!
The advantages of social proofing are boundless. Having a celebrity endorse your product enhances its perceived value. It makes your customers want to associate with it more. Think of the Kenyan fashion brand, Home254 who first started out making customized hoodies and quickly added other fashion items to their list of apparel. While there is no shortage of competition in this business, the brand has stood the tests of time mainly through endorsements. Songstress Avril adorns the brand’s products on many occasions, increasing the brand’s value, brand reach and pulling in customers. We can only imagine the revenue she brings to the business.
Enhance your packaging
Making a few changes to your packaging drastically could change how your customers perceive your product. You could even get away with slightly increasing the price of your product. Quick tip, the right colours could communicate the premium tone you might be aiming for. Be careful though, you don’t want to end up with a poorly executed packaging design…just ask Delmonte Kenya.
A product’s perceived value lays with the consumers and can differ from one person to the next. This perceived value usually has nothing to do with the price of the product and can be easily manipulated by a few positioning marketing strategies. Increasing the perceived value of your product makes your consumers feel better about the product and is in fact, a win-win situation.
Which other Kenyan brands do you think have managed to increase their product’s perceived value? Leave a comment below!