Think about your favorite product or service—one you’d return to purchase, again and again. Maybe it’s an appliance brand, your dog groomer or a local donut shop. Whatever comes to mind for you, chances are it’s not the product alone that makes it your favorite, but rather all the things that come along with it. Now ask yourself, what are the key attributes contributing to the value of that product or service, the factors that keep you coming back for more? These same value factors are key to delighting your own customers and to generating more new and repeat business.
What's the customer-perceived value of your offering?
Let’s talk about that donut shop, for example. There could be a dozen specific features that contribute to why this one shop rises to the top for you: Maybe it offers a convenient location, a wide selection of creative donuts (including a fun “donut of the week”) and reasonable prices, and the elegant and original packaging makes it a good gift or treat for an important business meeting. Maybe they also have a low-fee delivery service and delightful staff. This is an awful lot of value, without even touching on how amazing the donuts taste. Because yes, the donuts are the center of it all—but they alone aren’t the product.
Your product is more than just an item you sell or a service you deliver. From your customer’s perspective, your product is a whole package of attributes that come with it, and that’s what they pay for. You build this package by starting with the product or service, then adding value to it.
So, how do you add value?
It depends on the nature of your business. Your products can bring value through their attributes, their delivery and your customer service. What are the qualities or features that make up the whole package in your business?
The six key elements that impact customer-perceived value and overall customer satisfaction
Value is about perception. This is why it’s so important to know your ideal prospect and have a strong product strategy. After all, you can’t anticipate how someone’s going to perceive your product’s value if you don’t know who that someone is.
That said, your customers will perceive your product’s value through six key attributes that you can shape (and reshape):
What's the practical benefit of your product or service for your customer? How does it operate, perform, run or work to serve or support them? If you’re selling finished goods like furniture, clothing or heavy machinery, the answer may be obvious. But if you’re selling something intangible like financial, leisure or wellness services, you may need to think more about this. For example: Insurance provides peace of mind. Interior decorating creates atmosphere and can give a sense or belonging or professionalism.
This addresses how your product looks, feels, sounds, tastes and smells. Which of these qualities is most important—and has the greatest impact—on your customer’s perspective? How many patients would come to your medical practice if the waiting room seating was cramped and stuffy, and the wallpaper was peeling? But how many more would come if there were comfortable chairs, calming music, complimentary tea, and real orchids on the reception desk?
Most products have features that create some kind of association or emotional response for your customers. Elements like colors, shapes, scents and aesthetics can unconsciously attract or repel us. These associations can come from any range of life’s experiences and memories: A cafe could play background music to suit the generation they serve most frequently, and a day spa with a diverse staff and a zen-style garden could unconsciously send a message of inclusivity and relaxation.
Fortunately, you don’t have to guess what your customers consciously value about your products: You can simply observe their historical buying habits or ask them directly. They make purchases based on emotional motivations and unconscious associations, but they confirm and justify their purchase decision through logical and rational thoughts about your product. This is personal for each individual. Which type of target customers do you have? Here are three principal types:
- Experimental buyers are drawn to new, revolutionary and innovative products.
- Performance buyers look for reliability, dependability and proven quality.
- Value buyers look for the best price or the best sense of value for their money.
If you understand your target market, you can then determine how to best appeal to their unique purchase motivations.
Price and value
How does your ideal customer perceive the price of your product? And do they consider that your product or service is worth that price? For some customer segments, the lowest-priced product is seen as cheap and unreliable, but for others it’s perceived as a great deal.
Price-value is often compared to your competition but may also be compared to your customer’s own expectations of cost for your type of product. There’s no inherent problem in having the price of your products perceived in any of these ways, as price-value means more to some customers than others. The point is to match the perception of your price-value with the perceptions of your customers. For example, would budget-priced medical care make you nervous? Would a $30 bottle of wine suggest a better product than a $15 bottle?
Access and convenience
It’d be easy to assume that all your customers want easy access to your products. Who wouldn’t? With life so busy, most businesses strive to provide hassle-free product delivery and customer service. They think their customers want it—and most do—but what if it doesn’t really matter to them. It still comes down to knowing your ideal customer. While it may seem frustrating to you, some people take pride in being on a waiting list. Whether it’s for the latest model car, a dinner reservation at a hot new restaurant, or a place for their child at the best preschool in the city, they value that nature of exclusivity.
All of these factors are perceptions that you can shape and manage by truly knowing your ideal prospect. Remember: Your perceptions are not your customer’s perceptions.
All together, these attributes fuel your product strategy. The idea behind your strategy is to add value to your goods or services—and you can’t do that without considering all six of these key factors. With that knowledge, you’ll be well-positioned to maximize the value of your product in the eyes of your customer and keep them returning.