Have you read the best selling book Influence: The Psychology of Persuasion by Robert Cialdini? It's a classic in the field and in my opinion, required reading for a business owner.

In it there's a story about a jewelry retailer who had brought in a specific line of items that were not selling fast enough. She was going on vacation, but at the last minute decided to leave a short note to her store manager to cut the prices by 50%.

The manager, rushing to open the next morning, glanced at the note and made the changes.

When the owner returned from her vacation, she was surprised to see that other than a couple pieces, all the items had sold. Her manager was beaming when he came in.

I imagine the conversation went something like this… "What happened? Lowering the prices on those items really made them popular, right?"

"Lowering? You're a great kidder. I'll tell you what though, doubling the prices on those items was genius. They sold like hot cakes!"

The manager in his rush had thought she meant to double the prices, and customers had snapped up the items in response.

The new price matched the customers preconceived ideas of the value of those items, where the original lower price didn't. The higher price was in effect, a message to market match.

Value is a relative measure of the benefits you get for the money you spend.

In almost all cases, perception is the most important factor. Your customers preconception that "You get what you pay for" will influence their perception of the value you offer.

Refer to this earlier article:

In summary: The 9 times higher priced of two differently priced glasses of the same wine, actually tasted better to people (measured by their reporting and fMRI brain scans.)

• So what is your customers perception of the value of services that you offer?
  
• What can you do to influence their perception of the value of your product or service?

For instance, pricing, exclusivity, and guarantees are proven ways to influence used by companies. Other ways include free trials or samples, media coverage, thrid party endorsement, testimonials, referrals and positioning (titles like foreclosure, auction, or short sale all automatically suggest value.)

Picking one, how can you make your guarantee be a key influence of your customers perception of value?

Let's dig deeper into value. What are people pressed for more and more in this busy world of ours? Time?

What if you had an "on time delivery" guarantee. Worked well for Domino's Pizza and Federal Express. What about a price guarantee, an extended warranty built in, and of course a satisfaction guarantee? Brainstorm with your team about other out of the box guarantees, that would influence your perceived value.

Understanding your market is important. But beware of your own preconceptions. For instance, the only proven way to really know the most effective price, is by testing.

Other thoughts from around the net:

It’s all about the perceived value - One thing that counts a lot for any product is its perceived value. Customers do not buy the product, they pay for the value that the product provides them. The more the perceived value of the product, less relevant is the price tag on …

Improving your product's perceived value - So what is perceived value, and what does it have to do with your product? Perceived value is what customers think your product should cost, or more specifically, what value they think it has to them and what they would be willing to …

Perceived Value - Here is a quick video that discusses perceived value and the importance of understanding your audience, what you sell to them, and what it’s worth to them. I hope you enjoy it! To your success, …