Let’s be honest… as business owners, and experts in our field, we look at our offerings like an Ikea freshly assembled piece of furniture.
With all that love, a weekend of reading instructions and watching tutorials, and after arguing with your best half about how it “should be done”… we overvalue what we’ve just built.
To be clear, this is called in Psychology: The IKEA effect.
We tend to overvalue our things after pouring so much effort (sweat, tears, and love) into them. But are those the same perceptions your clients get when they get access to your offer?
It’s not, and I want to share the three things they’re looking for, and how you can maximize perceived value, without adding more to your plate (or to the already full plate your team has).
The Pinnacle of Maximum Perceived Value (Client value assessment)
The goal of having clients is to make them happy about their purchases, or if that’s not you maybe what we’re going to cover is not super applicable.
If customer satisfaction is part of your business plan, you need to understand that it’s linked to their perception of value, not what you think the value is.
As an engineer, nothing excites me more than a Venn Diagram that can explain it all:
Basically what we want when providing a client with a great offer, and having them already in the other after all of our marketing and sales efforts, is to provide a perfect balance of:
- Intrinsic Value
- Consumption
- Context
Measuring value delivered to clients (Intrinsic Value)
This is where most businesses get stuck… For one of two reasons.
Reason number 1 is being overly attached to what they think people will value, and then spending too much time overthinking what needs to be done, and not creating an MVP that can be optimized and innovated based on clear and concise feedback from real clients and users.
Reason number 2 is thinking that having a good product or service is enough for clients to understand its value, feeling underappreciated later on when clients show signs of buyer’s remorse and completions rates and drop-offs start going up.
You of course need a great product or service to be able to stand out and make your clients Raving Fans, but that’s ⅓ of the equation.
Using a very simple example… Using two restaurants, one has a Michelin star chef, and the other has a random dude that just copies Gordon Ramsey’s recipes from the old Masterchef series…
Which one has the potential to be better?
We could agree the Michelin star chef has more potential, but what is missing here?
Strategies to enhance client value in offerings (Consumption)
Our clients first of all need to consume whatever you have for them.
They need to use it, this is why early adoption and escalation of commitment are so important when selling an online service or product.
Unless they used it on a consistent basis, it’s going to be hard for them to perceive the real value of it.
Consumption and adoption are two of the most important factor to keep an eye on if you want to triple your profits, reduce churn, and increase client retention.
Going back to the restaurant example, the Michelin star chef has lots of potentials to create a great perceived value. But what happens if you go there, and for some reason your kids drop a big tantrum and you couldn’t even try that amazing meal?
How much is your perceived value?
And then you stop by the street food place, and the random Gordon Ramsey’s fan serves you a Pitta with extra garlic sauce, which one are you going to remember as valuable that day?
I know… Psychology and humans are tricky. And probably you’re thinking “But Jay, I don’t even have kids…”, or maybe “My kids would never do that”.
What could be missing for max perceived value?
Optimizing value for clients (Context)
Context is a simple word to explain that everything and any perception is context-dependent.
One thing happens to you and you might feel happy or sad, depending on the context.
A bottle of water for 2 dollars can feel expensive at the supermarket, but feels cheap at the airport…
It’s all context-dependent. And so is your product or service.
Even if you created the best product (intrinsic value), and your client used it here and there (consumption), but the context doesn’t allow for them to explore the magic wonders of imagination and anticipation, you’re leaving tons of money on the table.
This is why all the best companies in the world are going all in on client success.
An account manager, client success manager, customer representative, or any other person that acts as a bridge and liaison between the customer and the product or service, will increase its perceived value.
It’s one of the most profitable changes you can make to make sure your offerings match what clients are looking for in this decade. Personalization and high-touch experiences.
Going back to the restaurant, assuming you had a great meal ready, and you were able to try it out…
But the restaurant stinks or it’s super loud. Would the perceived value be the same as the chef coming to your place and cooking for you and your family?
Are we creating a safe space for full enjoyment?
If you do have an online service, are your clients feeling supported today?
How can you help them enjoy the environment (context) in a way that increases perceived value?
Is it a hotline, support email/channel, or a community where questions could be asked? Where do they feel they “belong”?
And don’t get me wrong… We are consultants and also work with agencies, some work is exclusively 1:1. And you might not have a community.
But what is stopping you from having a direct line of communication?
Next Steps
I know that this mind sounds obvious, but like someone once said: “Common sense is not common practice”.
That has been the epiphany people go through after reading our Book, Custom Success Manifesto, how simple it is, and that it was created with Online Service Businesses in mind.
If you haven’t read it yet, you’re clearly missing out. (or maybe it’s just my marketing tactic to create some FOMO!)
Grab our book here.
Talk soon and take care,
Jay
