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No doubt you have had the following experience.
Your running shoes are on their last legs, so you head to a shoe store. You're then faced with a difficult choice... Should you go for a pair from brand X, which are sturdy and affordable, or a pair from brand Y, which are high-end and more expensive?
You ultimately opt for the latter.
What happened? Your choice was influenced by the perceived value of brand Y. In other words, the value you consciously or unconsciously associate with the brand, (almost) regardless of its cost.
So here's what perceived value is and our best tips for improving it!
No, perceived value is not an abstract concept, but a marketing tool that you need to know about and use to improve your offering! Here's what it actually consists of.
It is often below the actual value of the product or service, which includes production and marketing costs. The difference between perceived value and actual value lies in this gap between objective cost and subjective worth.
In this sense, it is also called the "psychological price." This point is important for understanding perceived value. It does not necessarily refer to the product or service itself, but rather to the individual's perception of that product or service, what they imagine the brand to be, and what it can offer them.
Thus, the higher the perceived value of a service or product, the more likely the brand is to be chosen by the consumer. The consumer perceives it as capable of satisfying their needs, not only practical and functional, but also emotional and social—creating a strong sense of value.
As part of your marketing strategy, it is therefore in your best interest to measure, understand, and work to improve your perceived value through effective marketing strategies!
But what factors influence the perceived value of a product or service? Customer perceived value theory identifies several key elements.
Let's focus on the four main determinants of customer perceived value:
Brand image corresponds to consumers' perception of a given brand and its reputation. It is primarily cognitive and emotional, and is influenced by a number of factors such as its values, history, or level of success in its field of activity.
A positive brand image (expressed, for example, through e-reputation and customer reviews) contributes to high perceived value. The brand stands out, for example, for its high-quality products, its social and environmental commitments, or its capacity for innovation. This improves customer confidence and indicates high product or service quality in the consumer's mind. Social proof plays a crucial role here, as people often look to others' experiences when making purchasing decisions.
Awareness refers to the degree of popularity of a brand, product, or service among people in the market.
As you might expect, the higher the brand awareness, the more recognizable, memorable, and trustworthy the brand is perceived to be. These qualities therefore contribute to a high perceived value, as the brand is generally considered to be able to satisfy consumer expectations like no other brand.
The quality of a brand's product or service refers to its ability to meet or even exceed the expectations and needs of its customers. It is also influenced by various factors, including the technical characteristics, performance, ease of use, design, and durability of the product.
Here again, the relationship between quality and perceived value is parallel: the more a brand offers a high-quality consumer experience and user experience, the higher its perceived value. Consumers associate a quality product with a number of material benefits (such as durability and efficiency) and immaterial or emotional benefits (such as social recognition or peace of mind).
The last but not least determining factor in perceived value is customer satisfaction! Individuals who have had a positive consumer experience with the brand will inevitably feel satisfied and want to talk about it. Research shows that customer perceived value and customer satisfaction are closely linked. Customer satisfaction is therefore usually easy to assess, particularly through reviews and the brand's overall e-reputation.
Good customer satisfaction means (say it with us): high perceived value! The more satisfied consumers are, the more they make recommendations (hello, free advertising!) and are likely to choose that brand in the future.
As this is a subjective concept that is influenced by various parameters, it is not easy to assess a brand's perceived value. However, there are many tools available to businesses to get a reliable idea of their value in the eyes of consumers. While there isn't a single perceived value formula, several approaches can provide depth understanding of how customers view your brand.
Certain quantitative indicators, such as market share or revenue growth, can also be very useful in assessing perceived market value through careful analysis.
It is also important to consider e-reputation and collect reviews left on the company's various channels (social media, website, email feedback, etc.). Surveys and ongoing research help track changes in consumer perceived value over time.
Wondering how your company is perceived internally? Find out how to measure employee engagement!
To illustrate the concept of perceived value and help you understand its power, let's take the example of a brand offering contemporary-style organic cotton clothing—much like how people evaluate a car based on more than just its transportation function.
The perceived value of this brand will therefore be highest among people who maintain a certain lifestyle and are sensitive to environmental issues. In a competitive market, consumers assess perceived value mostly by weighing these tangible and intangible benefits against the cost—determining whether the price represents good value compared to alternatives.
Here are our top 4 tips for tangibly improving your perceived value and creating perceived value that resonates with customers!
Remember: the more effectively your products or services meet your customers' expectations and needs, the more positively your brand will be perceived and the more trust it will gain. It makes sense! So make sure you offer products or services that are of impeccable quality, reliable, durable, and functional. Studies consistently show that product perceived value increases when quality exceeds expectations.
At least 50% of the brand experience is about relationships! So make sure you are always there for your consumers to answer their questions and respond to their requests. Focus on providing effective customer service that offers personalized support. This doesn't require much time per interaction, but the cumulative effect on how people perceive your brand is significant.
Strengthen your brand image by emphasizing your values and commitments, whether in terms of environmental protection or innovation. Implementing communication that resonates with your consumers is the key to an impactful brand image! With this in mind, a professional email signature can be a valuable tool for communication that is aligned with your brand.
The final lever for boosting your perceived value is value for money and perceived value pricing strategy! Be sure to set a price that reflects not the actual cost, but the value your product or service brings to the consumer.
This perceived value pricing approach means setting a price that is high enough to convey the quality of what you offer (premium pricing when appropriate), but affordable enough that your customers feel they are getting good value. Or even the deal of the century!
The goal isn't necessarily a lower price—in fact, studies show that a cheap item may actually decrease perceived value. Instead, focus on how the price relates to the benefits received, creating strong perceived value for money.
Marketing jargon includes a myriad of terms that are more or less similar to each other. Here are the most common expressions that should not be confused with perceived value!
Perceived quality refers to the assessment of the performance and technical characteristics of a product or service. Consumer perceived value refers to a more overall perception of a brand and its products or services, encompassing both quality and other factors.
Where perceived value refers to the perception of a brand as a whole, hedonic value focuses on the emotional and sensory aspects of the consumer experience. For example, it may highlight the pleasure, joy, or comfort of a product—the experiential elements that make people value a product beyond its functional benefits.
Sign value differs from perceived value in that it focuses on the symbolic dimension of a brand, product, or service. It refers to the perception of what a brand represents in terms of social status or identity, for example.
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You now have all the keys to understanding and leveraging your perceived value! Find out how to calculate the engagement rate of your communication campaigns to better understand your audience.
To create perceived value, focus on four key areas: deliver high-quality products or services, build a strong brand image that resonates with your target audience, ensure excellent customer satisfaction through personalized service, and communicate your unique value proposition clearly. Research shows that people value brands that align with their personal values and provide both functional and emotional benefits. Use social proof through customer testimonials and reviews to reinforce positive perceptions.
Perceived value directly impacts consumer satisfaction by shaping expectations and evaluation of the purchase experience. When the perceived value matches or exceeds what customers expect based on the cost, satisfaction increases. Studies indicate that good value for money—where benefits clearly outweigh the price—leads to higher satisfaction, repeat purchases, and positive word-of-mouth. Customer perceived value and customer satisfaction work in a cycle: high perceived value leads to satisfaction, which in turn reinforces the brand's perceived value in future purchasing decisions.
In business, perceived value represents the worth that customers attribute to a company's products or services based on their perceptions rather than objective measures. It's a critical component of marketing strategies because it influences purchasing decisions, allows for premium pricing when justified, and creates competitive advantage. Businesses use perceived value research, surveys, and analysis to understand how their offerings are viewed in the market and adjust their approach accordingly. The perceived user value—what customers believe they're getting—often matters more than the actual production cost when determining market success.
