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Dynamics Of Perceived Value

Updated: Feb 16

In the ever-evolving world of business, success is not just about offering a product or service; it's about understanding the intricacies of value perception and strategically increasing your average sales. In this article, we'll delve into the concept of perceived value, explore how it can be leveraged to enhance your business's profitability, and share real-life examples of businesses that have successfully increased their average sales using these principles.

What is Perceived Value?

Perceived value is a vital concept that distinguishes the difference between the actual hard dollar cost to a business and the soft dollar value perceived by the customer. To illustrate, consider extended warranties on white goods or computers. These warranties might cost the business owner a nominal amount upfront, but their perceived value to the customer can be much higher, especially if the product requires repairs or maintenance down the line.

Adding Value without Breaking the Bank:

There are numerous ways to add perceived value to your offerings without incurring exorbitant costs. For instance, businesses can offer currency-like gift notes, vouchers for future purchases, or discounts on future transactions. While these may seem like giveaways, a substantial percentage of customers may never redeem them, making them a cost-effective way to boost perceived value.

Additionally, packaging services with products is an excellent strategy to increase perceived value. For example, when selling a new home, including a color consultation service can enhance the perceived value of the overall package without adding significant costs. The key is to avoid competing solely on price and maintain your average dollar sale.

Strategies for Increasing Average Sales:

Upselling through Perceived Value:

One effective strategy is to use perceived value to upsell customers. For instance, you can offer an additional product or service at a reduced cost, making customers believe they are saving money while increasing your average sale. This approach can significantly impact your bottom line.

Imagine selling digital cameras. You can offer customers the option to buy just the camera or a package that includes accessories, a photography workshop, and free photo downloads. The perceived value of the package far exceeds its actual cost, leading to higher average sales. The key here is that the original item the digital camera was never discounted.

Tiered Product Offerings:

Consider offering tiered product packages with varying levels of added value. Product A and Product B might be similar, but Product B comes with additional benefits like extended warranties, insurance, or maintenance programs. Customers are willing to pay more for these added benefits, increasing your average sale without giving away cash.

Conditional Guarantees:

Implementing a conditional guarantee, like the example of a lifetime guarantee on computer hardware, can be a game-changer. Customers appreciate the peace of mind that comes with knowing they won't incur additional costs if something goes wrong. This strategy can lead to increased sales and customer loyalty.

Real-Life Success Stories:

The Computer Supplier:

A computer supplier faced fierce competition in the price-conscious computer market. To set themselves apart, they introduced a lifetime guarantee on their products. While this guarantee had a perceived high value, the manufacturer only incurred costs when repairs were needed. By charging for annual servicing and offering free services to customers who referred others, they not only increased their average sale but also raised their average profit per sale by an impressive margin.

The Bike Shop:

A bike shop added value to their product by offering quarterly maintenance checks for three years, free puncture repairs, and other services. While these services had a low cost to the business, they had a high perceived value to customers. This strategy not only increased the average sale but also created opportunities for additional purchases when customers visited the shop for servicing.


In the world of business, proactive financial planning and strategic resource allocation are key to success. Leveraging perceived value to increase your average sales is a powerful approach that can set your business apart from competitors. By offering customers added value that doesn't significantly impact your costs, you can not only enhance your profitability but also build customer loyalty and long-term success. So, take a page from these success stories and start implementing these strategies in your business today to achieve greater financial success.

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