Nearly 5 years ago I decided to buy a NEW plasma flat screen TV. There wasn’t anything wrong with my current television. I just wanted to upgrade. I didn’t want to keep the old TV around the house so one morning, at 8 am, I decided to put it next to the curb and I posted a sign on it, “FREE – take me home.” At 7 pm that evening the TV was still by the curb despite the large amount of traffic that had passed by that day. I left it there for 4 days, taking it in each night for fear of rain, and I was bewildered that no one had taken it.On the 5th day I decided to try a little psychology experiment after all, psychology was my university major so I thought, “I should put my skills to work.”
I put the TV next to the curb, as I did each of the 4 previous mornings, but this time I removed the current “FREE” sign and added a NEW one. It read, “FOR SALE $150”. Would you believe it? When I arrived home in the evening the TV was STOLEN and the for sale sign left on my front lawn. My experiment worked, sort of. I managed to get rid of my TV but I discovered there was a possible thief on my street (I’ll leave that for another story).Creating perceived value, without the hype, for your product or service is essential. Sometimes it is just a matter of changing the “suggested retail price.” Hmm…. Why do you think companies add a “suggested retail price” to their products, yet they sell them for less. It’s about marketing. It’s about, you guessed it, PRECEIVED VALUE.
There are many things you can do to create perceived value. It isn’t always about the money but that is often what consumers look at. They want to know they are getting good bang for their buck. In fact, they want to know they are getting MORE for their money.
Wallace D. Wattles said, "we should give people more in use value than we take from them in cash value." Companies try and create this perception in their marketing and I bet many of the marketing department have never read Wallace's book from where I took this quote. They just know that people want more so they create MORE perceived value, often by adding a "suggest retail price."
Another approach to perceived value is endorsements. Why do you think companies go after celebrities to advertise their products? Associating a well-known figure with a product creates very high perceived value.
Ladies....
- Katherine Jeta-Jones for Elizabeth Arden and T-Mobile.
- Jesica Alba for Cover Girl.
- Ellen DeGeneres for Cover Girl and American Express.
- Halle Berry and Julianne Moore have starred in Revlon minimovie ads.
- Nicole Kidman appeared in theaters in a Chanel ad.
- Jennifer Love Hewitt for Hanes underwear.
The list goes on.
Men...
- Michael Jackson did Pepsi in the 80's.
- Justin Timberlake did McDonalds.
- David Beckham for Armani underwear and more.
- Brad Pitt did Pringles and Coffee among others.
- Shaq for vitamin water, Burger King and more.
- Cuba Gooding Jr. for Hanes underwear.
- Kevin Back for Hanes underwear.
The list goes.
Consumers are neither naive nor stupid. We know these companies are marketing to us but we enjoy it. We enjoy having our senses tingled. We enjoy the company’s marketing efforts because in the end, when we purchase the product or service, we subconsciously know (think) we have gotten the better deal.
I am currently in stage 3 of a 5 stage marketing experiment and I am surprised at the different outcomes so far, for the same product. The marketing experiment involves different price ranges for the same product, including a free option. I'll post another article on the results when completed.
Perceived Value – add it to your next marketing project. You’ll be amazed at the results.
Rodney Brace
