13 ways to increase the (perceived) value of your products.
The golden rule of any business is that a person will only buy a product if the value they receive from the product exceeds the value of the money paid for it.
Hence, a good product is actually the basis of all business transactions and by including as much value as possible, you actually make it easy for people to buy.
However, in sales or advertising, you cannot always add direct value to the product because the product will probably already be a given.
It is now your job to emphasize as much value in the existing product as you can. Without a clear idea of how we can position, sell, and market our products better than others, we face the danger of being compared through prices - which is also known as the race to the bottom. This is the last place any sales professional or marketer wants to be in. Luckily, there are a few tricks to do just that. This article will arm you with the best possible ways to increase the (perceived) value of any product you sell.
Let's get started with our 13 tactics!
SALE!
In many industries, consumers are conditioned to react to sales offers.
Everybody loves making a bargain, and thanks to an overload of advertising messages most people nowadays are already conditioned to rush into shops and buy things that are put on sale.
It just works like Pavlov's famous experiment with dogs, in which a bell rings when the food is served and the dog gets hungry. Later in the experiment, they would only ring the bell without serving any food. And still, the salvia levels in the dogs increased - the dogs were prepared to eat by the ring of a bell even though there was no food anywhere near them.
As soon as people see a sale, they scan every corner of their brain on whether they should go out and buy the product or not - this is your chance! This tactic has become so widely used that entire industries cannot operate without it anymore.
Have you ever seen a retail store without hundreds of sale offers, at any time of the year? Or have you ever tried to buy groceries without passing any special offers? It is impossible.
In industries such as FMCG (Fast-Moving-Consumer-Goods) especially, the customer already expects to find something on sale right now. Give customers what they want and help them with their decisions.
Sales offers require no updating in your product, production, or other processes in the business. All you need to do is send out some special offering and then watch if it resonates and brings results.
Expertise
Many professionals such as consultants, gurus, medical experts, and others charge what seems to be a king’s ransom for their services. In many cases, however, the products they offer are not that different from other providers on the market.
What makes them so valuable for clients is the high level of expertise these people add to their products and services to make the overall outcome more valuable. By generating new perspectives for the client and giving new input, even a commoditized product can suddenly become a much sought-after solution.
As sales professionals, we can always impress the customer with new information, new ideas, and new input to increase the value they receive from us. Keep in mind, however, that this means our level of advice has to be significantly higher than those of our competitors.
It is not enough to bring some facts about a product, we really have to awe the customer with our deep knowledge and expertise. While this is clearly possible for everyone, it will require a major commitment and understanding of what we do, our markets, our products, and our customers. A high level of self-motivation and self-education will be required for this tactic to work.
Improve design and packaging
The first thing a customer sees of your product is the packaging and its outer appearance. Most of this information is processed unconsciously and strongly influences the buying decision.
The details of your packaging will matter a lot, and small twerks on a standard design can help to give your product an impressive look that will set it apart from competitors next to it.
Apple is probably the company that has done the most remarkable product and packaging design for products that are technically not that different from alternatives in the market.
However, because of their genius design and packaging these products appear to be better than others, at least to a certain group of buyers who value the looks and feel of a product.
If you have ever bought an Apple product, the design is minimalist and simple, but also impressive and laid out for the functionality of the product. It is reduced from unnecessary extras and left with the important elements in a sleek design. The packaging too is designed in a way that if you open it, the product is basically presented to you instead of just unwrapped. The product thereby demonstrates and sells itself.
Even if the technical details of their products are not necessarily better than those of other players in the market, what always sets them apart is their design and packaging. When a customer is faced with the decision of which product to buy, the first thing they will notice is exactly this special design in the packaging.
Those details will matter a lot and subtly influence our subconscious decision-making.
Car manufacturers are another example of constantly bringing new designs to their vehicles.
In order to sell a new model of the same car, the design needs to be clearly better and more distinctive than the previous model. People have to be in awe when they see the new model driving around, or at least should definitely know and understand this is the new version, and that it is the future and it is better.
While the engine and interior largely stay exactly the same, the design alone has to communicate the message that this new model is the new standard if you want to have a new and better vehicle.
If your product is sold in retail, the design and appearance of the packaging compared to others on the shelf will largely influence the choice a buyer makes.
It should be informative and attractive, but also emphasize why this product is the ideal choice.
You can learn more of this in detail later in the article with Demonstrate the Value.
Coupons
Coupons trigger several emotional responses in a buyer. As if shopping a bargain and making a good deal were not enough, you can further fuel the shopping spree by adding coupons to all those special offers. If calculated correctly, coupons are a win-win.
A classic example is “buy 2 and get 1 free”, and while it appears that the store is giving you one product for free, there is actually a clever mercantile concept behind it:
Usually, a customer would only buy one of those products, but with the incentive and the coupon, the same person now buys 3 of them but only pays for two.
The store in return makes larger sales in bulk, which gives cheaper purchase costs for the product and faster turnover rates for its products. Especially in retail, turnover costs are critical to the survival of a business. With coupon offerings, you can add value to your customer's shopping and bring your costs down simultaneously. You also become more valuable to your suppliers because now you order larger volumes from them. A real win-win-win for all sides.
Look for potential products where you can offer a great deal for the customer, AND earn a nice profit on it. Forget about traditional loss-leader strategies here as you learn them in marketing classes. It would be a waste since you can really make use of many beneficial concepts in this case that also bring in profits.
And by the way, coupons will also draw the attention of people who otherwise might never have shopped with you in the first place. You might attract buyers who have never considered buying from you, but they do now because they found a bargain. If your store online or offline is built well and has other great benefits to offer, you can easily create new long-term customers for your business, decrease your costs, and offer a better deal all at once.
Derogate the price
If it seems too expensive, don’t let it look expensive.
With this tactic, you take the price of your product and compare it to something the customer already uses. Thereby you give the original price a new context, compared to the price stand-alone. The best way to do this is to compare your product to something the consumer uses ideally on a daily basis and that is not even considered when they buy it because their consumption is so automated.
For example:
Most people start their day with a cup of coffee.
Many of them not only drink one coffee in the morning but also multiple more throughout the day. With Starbucks and other outlets charging up to 5$ for a single coffee, this makes a good comparison for people as it is something they can relate to - and after all, who would argue with drinking a cup of coffee?
Nevertheless, a 5$ coffee a day adds up to 150$ per month or even 1.800$ per year!
Now there are a large number of products you can get for this price point. The daily coffee in your Starbucks suddenly uses up some quite budget over the year. And there is a large range of products you can compare it with!
You can compare the price of your product to the habits people have, as with: “It costs less than a cup of coffee a day”.
It does thereby not only use the already accepted habit as a mental anchor, but it also makes the price of your product appear much more attractive. The coffee is already justified in the mind of the customer. The 5$ a day is their daily treat. If your product can be compared to similar costs, buying it would be a no-brainer.
Hint:
First, make sure the customer also drinks a cup of coffee a day at a Starbucks or similar.
If they don’t, just ask for other habits they have or how they spend their day. We all spend a lot of money somewhere. Just openly ask and have a conversation until you find one thing the person freely spends money on that can be compared with the costs of your product.
However, you should be careful about what you compare your product with. The compared item should be socially acceptable and avoid any controversy. “Less than a pack of cigarettes a day” or “less than a bag of toilet paper a week” might not stir up the best psychological environment for selling your product, even though they might also be used on a daily basis. Instead look for the easy-going consumer things people like to spend money on, ideally on a daily basis.
Explain why people are making a good deal
Is your offering really that good?
People are very suspicious of any marketing or sales message these days, especially if you start with a brand-new online shop or a new product nobody has ever heard of before. And understandably so, because there are lots of scammers out there and many people have been burnt by trying things in the past.
Even if you have a great offer with incredible prices - people might simply mistrust you. The antidote for it is to explain why you are making such a good offer or what makes you capable of providing such great value. It might happen that you just received too many items due to supply difficulties and thus can offer such a good deal.
Or what about a significant price drop for the resources used in this product?
Occasionally you can also get bulk discounts from your suppliers and pass them on to your customers. Whatever your secret sauce is, let your customers know that there are special conditions and they can reap benefits from it.
All those scenarios do happen in real life and offer an explanation of why you can do better right now than your competitor. As a marketer or business owner you want people to bring their mental B.S. detectors down, and therefore you will have to explain why you are offering a good deal.
Simply lowering prices for a certain time might make some people skeptical, or then they might expect you to always have them lowered which makes profitable sales in the future difficult. Studies have also shown that temporary price reductions have the opposite effect - people who would have bought anyway now spend less money with you, and those who would not consider buying from you will also not be tempted to become your customers even with 20% off. Just selling cheaply without any reason is thus a clear strategy for failure.
Cheap prices can only be justified by a solid basis such as a more efficient cost strategy or advantages in the supply chain.
By giving them an accurate story of why exactly your company can make the better offer right now, you give people another reason to justify the purchase in their mind.
Bundles & Packages
One of the easiest and best ways to provide more value with the same products is to combine them into certain packages. Especially if your product has add-ons, up-sells, or cross-sells, such packaging deals can make a difference in the value a customer receives.
It also works beyond physical products. For example, if you sell industrial equipment, you could offer to bundle it with a 3-year service guarantee that provides fast support every time the machine breaks down or needs maintenance.
Overall such a package has to be really desirable for the customer. Don’t try to add those nick-nacks from the back of your warehouse nobody wanted to buy in the last years and expect customers to rush to your door because you now bundled them with your major product. Whatever you decide to offer additionally with your product has to enhance and increase the overall value received. The goal is to make it even better than just the product itself and thereby boost your sales and response rates.
Education
If you are selling complex products that are hard to use, offer many different variants or functions, and are intended for long-term use, you can always offer to educate the customer about how to use the product better.
This comes close to what in the SAAS Industry is commonly known as customer success - making sure that your customers are really getting the maximum out of the product they pay for. This not only helps the customer and keeps them happy, but it also helps you as the seller to stand out, emphasize the level of service you provide, and reduce customer turnover rates.
You can use workshops, seminars, online courses, or 1 to 1 coaching to demonstrate how to better make use of your products. The more you can offer such programs and include the costs for them in the basic pricing of your products, the higher the perceived value you offer with the same line of products. And especially online courses can be made once, and re-sold dozens of times.
Increase your speed of delivery
The majority of people will accept waiting for a product. But there are a few buyers in every market who want to have the item now, or ideally even yesterday.
The reasons why they want to have the products so fast can be manifold. Some products might be needed urgently because an industrial plant has to stop working without spare parts in some machinery. Or someone might have an urgent meeting tomorrow and need fast transport to their destination of choice as soon as possible. In other cases, a buyer just wants to be the first of their friends to have the new phone or to have their new PlayStation.
To this special group of buyers, this speed of delivery is worth a lot of money.
The product itself does not have to be changed in any way, just as your marketing materials and sales strategy can be absolutely identical. What you need to work on is to provide absolute fast and reliable delivery for your customers. In many cases, this doesn’t even require a lot of investment on your part. A lot of the necessary steps can be outsourced or simply upgraded with your logistics provider.
Having a lightning-fast speed of delivery will also set you apart as a reliable partner and clearly demonstrate that you can keep your word and are there for your customers when they need you. If you are one of the few, or maybe even the only one in your industry who can deliver really quickly, this means you can easily charge premium prices for your product and services.
Amortize the price
Make large numbers easier to digest.
This strategy is similar to derogating the price and you can use both of them together with great effect. Basically, it takes a large price and breaks the investment down into smaller seeming chunks. The trick is that the final price completely stays the same, but people will perceive it to be cheaper. Let’s look at how this works.
Assume you sell an item that costs 360$.
Actually, this is not a cheap item for most people, so many will make a lot of considerations before they move on and buy from you. But in fact, 360$ is less than a dollar a day for the next year. Therefore the product with a sticker price of 360$ costs less than a dollar a day for the next year! All that is necessary is that the lifetime of the product is longer than one year and your price is easily justified. Who can't afford a dollar a day?
Oh, your customers think that the insurance for 25$ a month is unnecessary?
Well, it gets the family secured for less than a dollar per day.
How about those 300$ monthly car payments?
All you have to do to afford it is to set aside 10$ per day, and that brand-new SUV is all yours.
The magic is that the initial price seems to come out of view, or at least looked at from a completely different perspective. All you do is break down the big price tag into weekly, daily, or even hourly amounts of money to make them appear almost meaningless.
1.000$ is a lot, but around 3$ per day for the next year sounds like a bargain - after all, it is less than the price of a cup of coffee per day (back to derogating the price).
Remember: the price of our product stays the same!
It is actually shocking how effective this strategy really is because you don’t change anything about your product or even your price in general. All you do is give it a different context, a new perspective.
What we use is a psychological effect that gives the customer a much smaller barrier to buy, as it would otherwise occur if they have to think about spending the whole amount at once.
And yes, all offers of leasing items or using credit for any purchase are using this strategy.
This makes the large amount of monthly payments much easier to digest. You can use this tactic to make almost anything look heavily discounted, when actually it is not discounted at all.
Demonstrate the value
This should be a no-brainer of course, but really look at your next presentation or marketing material and ask yourself honestly if you really make clear what this purchase will do for the customer.
Don't just mention the price, explain in detail why life will be easier, better, or more convenient after the purchase. Focus on what problem the product solves, how it makes people feel, and how it will increase their status in society. For this tactic to work, you should first have deeply analyzed your products or services and a list in your head of what people really get out of it.
Will it make them feel younger?
Will it help them to recover from injuries faster?
Does it make daily tasks easier?
Does it save time?
Will it get people more attention?
For a lot of people, a monetary value will be enough to convince them, but a lot of people have far more motivations in their lives than just money In such cases, look for anything that has an impact that is not financial. It is the value money can't buy that people often spend the most money on. Nobody buys the Lamborghini for its horsepower or torque figure.
Such cars are bought because of the feeling it gives the owner, or because of whatever other people will believe about the owner of such a car.
Forget technical data in general and mention one benefit after the other. Give so many benefits, that the customer basically has to buy it in order not to look stupid. Overwhelm the customer with an endless stream of positive impacts this product will have on his life.
Sooner or later there comes a point, where people just have to buy because it is the obvious best thing to do after hearing so many positive things about it. After hearing benefit after benefit and advantage after advantage, there comes a point when even the most skeptical person gives in. Never underestimate the words you say in a sales conversation or put in your ad copy. If done right, this will get people to act the way you want them to act.
Show what other people pay elsewhere
Is your price really good? Then by all means make it clear to the customer that it really is cheap! Show what other vendors are charging for similar services, explain your pricing strategy, and focus on the massive value that is left for the customer or demonstrate what this product costs elsewhere.
Even if you do not have the lowest price, this tactic still works. All you need to do is find one competitor who is offering the same product for a higher price, and again you seem to offer the best deal. Thus anybody can use this strategy, even if you do not sell your products cheaply. Don't just make a direct comparison in prices, also focus on how much value your specific offer brings to the table.
This works best when you offer bundles of products, where each individual item has a high price tag but it gets cheaper if you buy the whole package right now and today.
Often the individual items put together have a far higher price tag than a bundle.
You can look for the individual prices from your competitors and demonstrate that taking all facts together they far outweigh the price you are asking for today. With clever bundling and packing different stuff together, you can once again be perceived as the top-value bringer in your industry and as the best price by far.
This tactic also frequently occurs when the same items used to be more expensive in the past, or when other retailers really do charge more for the same thing. Even if it used to cost more in the past, it still works as an effective strategy.
The customer wants to be psychologically assured that he is making the right decision. By highlighting that others even had a much higher bill than he would have right now, you add an additional layer of security for making the purchase.
Deadlines and Scarcity
No guide on adding value would be complete without the topic of scarcity. And no advertising should ever come without any urge to buy right now.
After all: if you could also buy the same item next week, why hurry?
Well, until next week the customer will probably have forgotten that you even exist, that's why. Therefore it is important when you get the rare attention of your customers, to give them a clear reason for buying right now and why it is really the best time and choice to do so.
You certainly have heard the classics like “limited stock” or “only as long as supply lasts” over and over again because they just keep working throughout the decades. Another good trick is to give a discount that only lasts today or until this week. One of Europe's most successful kitchen manufacturers has had the same trick for more than 30 years successful in use:
Every week, from Monday to Friday there is a 30% discount. The discount ends on Friday.
And every Monday, the next discount starts with 30% off, again. Then on Friday, this discount ends again.
And so forth.
And every single day when a customer enters their stores and get a quote with a price, they are told that this price only lasts until Friday, and it is 30% off.
Even if people know what game is played here, it still works! In the back of their mind, they might be wondering if the discount really comes again next Monday. Their mind is spinning on all kinds of what-if scenarios:
Maybe they will change the pricing structure this time, and the discount will be smaller in the future. Maybe there will be a new line of kitchens next week, and this one will be gone
Maybe this is the last discount they give out and change pricing.
All these things do not have to be said in a conversation, your customer automatically has these thoughts if you apply scarcity. Hence the customer actually convinces himself about why he should take this product right now. It works over and over again successfully, even as people find out what is going on.
That is so amazing about scarcity.
It is one of the most effective psychological boosts you can use in advertising or sales.
No marketing campaign ever should be conducted without it, and no sales pitch will be complete without applying it.