Customer perceived value approach: pricing There are many techniques companies can use to improve customers’ perceived value of their product. 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. Perceived costs include money, time, and labor. For example, buying a new suit will help you stay warm (physical), land the new job for which you are interviewing (logical), and save you from the embarrassment of walking around naked (emotional). Perceived product benefits exist on three levels: physical, logical, emotional. Customer perceived value can be determined by the relationship between perceived benefits and perceived costs: In fact, there are many factors at play in determining how a customer perceives a product’s value.Ĭustomer perceived value often has little to do with actual price. How customers weigh a given solution may not depend entirely on how well the solution fits their needs. From most SaaS companies, people do not merely buy software, but rather solutions. He buys a drill to have the capacity to make holes. For example, a customer doesn’t buy a drill to have a drill. When making a purchase, a customer values a product’s benefit higher than its function. This perceived benefit, in addition to his opinion of the product, are what create customer perceived value. A customer buys a product for the perceived benefit he will gain from it.

In fact, function is simply a means to deliver what a customer really wants: benefit. Consumers don’t purchase products primarily for their functions.

Capitalism ii negative brand loyalty