Impact Pricing Podcast

#513: Pricing Table Topics: King of Diamonds – Customers Buy Perceived Value

This one is the King of Diamonds from the Impact Pricing card deck. 

We know that customers trade money for value. They’re buying value, but what kind of value? 

There’s lots of ways to break value up, but in this meme we want to talk about the difference between perceived value and real value. Let’s imagine there is this true measurable amount of value. For example, maybe I’m selling a gold coin and that gold coin actually has a value that I could look up online and say, what’s the value of this coin? Got it. 

“What I’m willing to pay is based completely around how much value do I think I might be getting from that product.”

– Mark Stiving

But when I’m selling a service or I’m selling a product, I can’t just go look up online and say, what’s the value of this? Especially to me, because I don’t know how I’m going to use it. I don’t know how it’s going to create more profits. And so, what I’m willing to pay is based completely around how much value do I think I might be getting from that product.

Now here’s a great example. Imagine that you’re selling a coffee cup. So what’s the value of a coffee cup to somebody, right? Maybe it depends upon what the design is on the front, or who really wants it, or what the lid looks like. I mean, there’s lots of different factors that might define what someone’s willing to pay. And so, they say, yeah, I’d pay 10$ for that coffee mug. 

But what if there was a gold coin at the bottom of the coffee mug when they bought it, and that gold coin is worth 1, 000$. They just bought 1, 000$ gold coin for 10$ because their perception was, hey, it’s a coffee mug. They didn’t perceive the value of the gold coin at the bottom. They’re not buying the true value, they’re only buying the value they know about. 

How do we use this information? Well, it means to us that we have to be marketing and selling the true value of our product. Because if we’re not communicating our value well to our buyers, they’re not using it as they make decisions on should they buy our product or not, and how much would they be willing to pay for it.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our cards, pick a card, read the saying, and then talk for one to two minutes about what that card says. You’ll become a better speaker and expert.

If you have any questions or feedback, please email me, [email protected]

Now, go make an impact.

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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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