Perceived value, much like beauty, is in the eye of the beholder.
And when it comes to marketing, the one doing the beholding is the customer.
To help you define the marketing message, in today’s article we share four examples of optimizing customers’ perception of value.
Read on for examples from software, heavy equipment manufacturing, writing services and ecommerce.
(As seen in the MarketingSherpa newsletter. Click to get a free email subscription to the latest from MarketingSherpa.)
There’s a wall.
It exists between your company and your customer.
On one side of the wall exists the true value your customer will receive from buying your product, subscribing to your email newsletter, downloading that white paper and becoming a lead, calling that phone number, making that donation, etc., etc.
On the other side, is the customer. They can’t know with certainty what’s beyond the wall, they can only perceive what’s on the other side.
But marketer, you have a giant sledgehammer. That sledgehammer is the words you use on your website, the design of your brochure, the relevance of your media plan, the timeliness of your drip campaign.
When wielded with skill, your sledgehammer slowly chips away at that wall, and through each new crack, the customer perceives just a little bit better what’s on the other wide.
But when swung wildly, that sledgehammer only causes more noise and confusion, further complicating your customers’ ability to perceive that value.
OK, enough with the analogy. Let’s dive into specific examples of improving customers’ perceived value to improve results.
Value perception is critical to grand, over-arching decisions — like the perceived value of the product or company itself.
But customers must perceive value about smaller attributes around the main decision as well. These can exist in the process-level value proposition.
For example, I probably should wash my car. And I will eventually. I just don’t perceive the value of doing it now. I can still turn on the car, drive it, get from point A to point B in a slightly dirty car.
However, if I had a flat tire, I would instantly perceive the value of addressing that problem.
Here is a look at the control landing page.
Creative Sample #1: Content lead gen landing page for software company (control)
Creative Sample #2: Lead gen landing page for software company (treatment)
The treatment is based on a hypothesis that focused on scarcity:
Communicating the urgency of the offer, that the free e-book download is a limited-time offer, will result in a higher conversion rate.
The treatment generated 6.8% more lead form completions than the control at a 97% level of confidence.
"I think what surprised us is the fact that a limited-time offer did do better than the control. We have actually never tested a limited-time offer on one of our content download pages before," Jessica Meher of HubSpot said in a case study about the experiment.
As Flint McGlaughlin discusses in The Power of Perceived Value: Discover how a well-marketed banana & roll of tape produced a windfall, one way to further increase the perceived value of acting now for this offer (and thus improve the conversion rate) would be to increase the credibility of the limited time offer by explaining why the offer was only available for a short time.
McGlaughlin, CEO and Managing Director, MECLABS Institute (parent organization of MarketingSherpa), explains more about this experiment in the video below, along with how you can use scarcity, influence and story to increase perceived value.
As I mention in the summary, value perception, much like beauty, is in the eye of the beholder. There is no singular way every different possible audience and customer for your product will perceive a product or offer’s value. You have to understand each group of customers’ motivations.
This is especially true for multinational corporations.
Jahana Uchtman, owner, Your Digital Marketing Assistant, was working with a client to repurpose American product ads for a South American audience. However, the team noticed a much lower conversion rate and negative engagement around the Facebook ads in South America.
When they analyzed the reason for this performance, they discovered that a value element that resonated well in the United States — “Reduces Man-Hours” for a piece of equipment — did not have the same value perception abroad.
“In South America, labor is cheap, and jobs can be hard to find. Workers were pushing back against a product that could put them out of a job!” Uchtman said.
So, the team tried to identify a value element that would have higher perceived value in that market. The new headline attempted to show the product’s versatility: “More applications for your money.”
“We re-worked the ad text to highlight a different selling point and found a 74% increase in conversions. The original video was reused because the underlying message was the same — the equipment can be used in a variety of industries and applications — and we didn't have to spend money on a new video.”
The way you sell your products or services isn’t always how companies use them. In other words, they may perceive the value differently than the way you are marketing it. By learning from product usage, you can find more customers.
Daniella Bell is the Founder and CEO of Scribly.io, which she started as an unlimited copywriting service.
“I thought the unlimited angle was my hook, but it’s actually not what people wanted. It was only when I paused to reflect on my current clients that I realized that almost every sale was a fixed custom package,” Bell said.
“Realizing this was a lightbulb moment at the end of a very busy, unfulfilling week filled with lots of sales calls but few converted customers. That night, I decided to officially shift from a focus on unlimited copywriting to flexible content marketing packages,” she said.
She shifted the core value prop to a growth service rather than a writing service, promoted it in a bunch of Facebook Groups, and generated 35 new leads.
“The results of this shift were huge. I did a soft launch with old clients and managed to sell four packages after emailing six people. We generated $5,000 in new sales in month one, and that figure has steadily grown since. We've also seen huge improvements in our churn rate, as we are now able to sell recurring subscription packages much more easily. Churn rate has reduced from 15% to 2% since the change, which has a huge impact on our MRR (monthly recurring revenue),” Bell said.
Once a customer has decided to purchase a product, sometimes they must consider the perceived value of how to make that purchase. Should they pick up in store? Get it shipped quickly? Slowly? Buy in bulk? Buy an ongoing subscription?
For example, Kurt Philip, CEO, Convertica.org, was working with an ecommerce website to help it increase conversions on auto-ship subscriptions to get a better return on ad spend.
The original product checkout page was basic, with an add-to-cart button, three purchase options and some social media icons for trust.
Philip made changes to the page over a series of tests to increase the perceived value of the auto-ship option. These changes also likely decreased the anxiety around the auto-ship option as well.
The changes for the first test included:
This first test increased conversions by 25.4% over control, increased auto-ship subscriptions by 41.5%, and revenue went up by 30.4% in the month following.
He then launched a second test, with these changes:
After testing this rollout for a little over a month, results showed an 85% increase in auto-ship subscriptions, 54% increase in total number of orders and 55% increase in revenue. Combined with the results of the first test, conversion increased 101.82%, and recurring revenue increased 162%.
“This is a huge testament to the perceived value theory. By including trust icons, improving the page design and images and including customer reviews, it massively boosted the perceived value of the product,” Philip said.
“Really take time before testing to understand the main customer pain points and what psychological triggers these customers have about your type of product. If you can understand your customers, then creating winning tests and campaigns is so much easier because you know how to increase perceived value,” he advised.
How much value must customers perceive? Enough value to outweigh the total (including non-monetary) cost of that choice. For example, if you sell software to a customer who already has a competitor, they must perceive enough value to compensate for any price difference plus the cost (in time, effort, disruption, etc.) of migrating off the incumbent software and to your software.
Even small conversion actions have a cost. Here’s an (admittedly self-serving) example, the MECLABS email newsletter. Even though there is no monetary cost to receive an email and just a very small cost in time (how long does it really take to read one email, people? C’mon!), many email newsletters don’t get subscribed to or read.
There is not enough perceived value (especially in a crowded marketplace of many email newsletters on countless topics) to overcome that even small, non-monetary cost.
Which is why I was so happy to receive the following note from Rich Jefferson, VP Marketing and Communications, American Foundry Society, which perfectly sums up the tradeoff between perceived costs and perceived value:
“In my 3 departments, I am responsible for promoting our 10+ conferences annually, 3 magazines, several newsletters, video, an annual forecast, keeping our website fresh, book publication, and coordinating closely with our lobbying presence in Washington, D.C. Time is always squeezed. That’s why I love MECLABS email. I know from the subject line if I need to read it (I usually do), and I know the material is sourced from great research. MECLABS gives me the best chance to keep up with the best thinking in communications.”
What Matters Is the Perception of Value, Not So Much the Product (by Peter J. Rosenwald via Target Marketing)
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