Identifying and Raising Customer Perceived Value

A customer values a product's benefit higher than its function.

Customer Perceived Value (CPV)

In SaaS, people don't buy software... they buy solutions. Oftentimes, there are many factors at play in determining how a customer perceives a product’s value. Customers weigh a given solution according to multiple areas of benefit and it may not depend entirely on how well the solution fits their needs nor depend on the actual price. Rather, it is often determined by the relationship between perceived benefits and perceived costs (of which there are many).

In this article, identifying and raising Customer Perceived Value is explained in the following segments a.) identify and describe Customer Perceived Value (CPV), b.) highlight the potential perceived benefits and costs, and c.) offer strategies on how to raise the CPV bar.

• Identifying customer perceived value (CPV)

Perceived value can be described as a customer’s view or appraisal of a product or service based on their perception of its costs and benefits. This includes whether it meets (or will meet) their needs and expectations, how it compares to competitors, and its quality.

Prescribing customer perceived value (CPV) is a crucial first step in spotlighting your value proposition and escalating your profits. Once this fundamental go-to-market (GTM) strategy is defined and understood in SaaS, it becomes the gateway to nailing down your pricing and value prop – boosting revenue and customer success.

However, identifying it for what it truly is for your customer base requires the following:

1. That enough customers use the product

2. Assessing their appraisals over time with consistent feedback loops,

3. Conducting specific surveys and in-depth discussions

4. Understanding that perceived value is just that, based on perceptions, and those can be fickle and quickly impacted by perceived benefits and costs

5. it requires continual measurement and advocating both internally and externally.

• Potential perceived benefits and costs

When comparing the difference between perceived benefit and perceived cost, if the difference is positive, customer perceived value is high, meaning customers will buy a product or service... and ultimately stick with it and stay sticky within it.

Perceived Value - Benefits vs. Costs

Perceived Benefits:

- Results / Met Expectations / Positive Emotions

Which are really the solutions the customer signed up for... A customer wants to quickly see the results of what was promised in the marketing or sales offerings and many a perceived value is based on subjective values and emotions. Identifying the Ah-ha! moment for clients will help CS teams to quickly guide customers along the fastest route to success and value realization, increasing customer satisfaction and loyalty.

Perceived Costs:

- Price/ Unmet Expectations / Negative Emotions

Studies have shown that our brain is wired to make choices based on emotional triggers - so when assessing whether a product or service is worth the price, they rely on subjective judgments and emotions.

Ensuring that various elements of the customer life-cycle live up to the perceived benefits will ensure the cost becomes less of a pain-point and more of status symbol.

• Strategies on how to raise the CPV bar

There are many techniques companies can use to improve customers’ perceived value of their product, to name a few.

Pricing:

While it's not the most important thing, price does play a role in determining a customer’s perceived value. Techniques like 'the power of 9', removing 'signs of monetary value' e.g. (such as $ or €, or monetary value words, like dollars or pounds) and changing the unit of measure, e.g. from money to other things that the same amount of money could buy.)

Credibility:

Consumers are willing to pay more for brands with a reputation for quality. With credibility comes higher levels of trust and satisfaction. Some great ways to improve your company’s perceived credibility score are through trials, testimonials, and partnerships.

Value of Time:

Perceived value of time is higher than perceived value of money. Marketers and CS teams should take note of this on two levels: (1) time sells, and (2) consumers want purchasing and product utiilzation to be convenient and free of time restraints. Because consumers don’t look to buy a product but rather the benefit that the product brings them, they are more likely to internally link that benefit with the amount of time spent enjoying a product. For SaaS companies this is especiually true... if you can prove that your offering helps with time efficiency, you will more easily raise the customer perceived value (CPV).

Offering inter-site features, such as a “click-to-call” buttons, features that make completing purchases, answering questions, and offering support easy, and ultimately expedite any assistance a customer may need, is no longer a nice-to-have, it's an expectation.

Emotional Connection:

Appealling to your customers emotions or values is one of the most effective ways to increase customer perceived value (CPV). In order to do so, it’s important to know what types of things your customer might appreciate. Conscious capitalism (or sustainability), a sense of community and locality are all ways to tug on their proverbial heartstrings and offer fraganced hints at familiarity and connectedness.

Closing thoughts...

Identifying and Raising Customer Perceived Value is fundamental to any business growth trajectory. Customer perceived value (CPV) is dynamic and customers offer much in the way of guiding your product and perceived value through the ways they end up using and appreciating the solution your product brings. Listen to them and, for a full-spectrum view of their perceived value, use data-driven insights to connect the subjective to the objective.

CPV is manageable and making use of the strategies above to mold and increase your CPV is a great way to stay connected to what they ultimately want, keeping you in the driver's seat of their success journey and gathering valuable data with which to approach prospects.