Increase Perceived Value

One of dozens of strategies listed and linked to here:
How to Make More Money From Your Business


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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Every Way to Make Money | Increase Perceived Value