Imagine you’re on stage of The Value Is Right. The lights are bright, applause is thundering, and yet you clearly hear the announcer boom “You could be leaving the studio in this… A NEW CAR!”
“Now, in a moment we will pull back these curtains. You will see two cars, and your job is to choose the more valuable car. You only have 3 seconds, are you ready?”
The two curtains are pulled aside and the audience explodes.Behind curtain number one is a brand new Ferrari.Behind curtain number two is a brand new Ford Pinto.You hear the game show host boom “Contestant, you have 3 seconds to choose your car…
Which will it be – The Pinto or the Ferrari?”
You pick the Ferrari of course… And in much less than 3 seconds.
But why do we make evaluations so quickly?
According to Malcolm Gladwell in Blink: The power to think without thinking, our evaluations are made within the first two seconds whenever we “meet a new person or have to make sense of something quickly or encounter a novel situation.” So we’re making judgement calls of perceived value on an hourly basis, and we usually do it quite brilliantly. That’s a good thing too, since perceived value plays a huge role in the decision making.For example we would choose:
This usually works out in our best interest, but not always.But in the case of the game show cars, no information was given and there is no time to ask. You have no clues on how either car performs. You don’t know if they’ll start. You don’t even know if the Ferrari has an engine under the hood. You just instinctually evaluated what was presented to you using what you knew at that moment.
How does all this affect me and my product?
Every potential customer is considering what your offer is worth – from your opt-in form to your product sales page. Your job as a product creator or marketer is to elevate the perceived value of your offer way above the value you’re asking in return – even if all you’re asking is an email address.Your product can truly make a difference in people’s lives and businesses, but who will know just how helpful your stuff is if they don’t see the value in it? So let’s learn how to present your product so it gets in the hands of those that can benefit most. There’s more to this than just collecting money.We’ll share 5 extremely effective ways to increase the perceived and inherent value of your product, for a double-win. But first, let’s take a quick look at a real-world example of a best-selling product losing nearly all perceived value by being presented poorly.
37signals – Getting Real Value(less)
We’re fans of 37signals, a great company with a small, but impressive array of products such as Highrise and Basecamp. They generally do things right. Here they chose to offer their best selling book “Getting real” in return for opting in to their mailing list.That means that you can get their best-selling book “Getting Real” in exchange for your email address. That’s a win-win for everyone – subscribers get a great book jam-packed with software development goodness, and 37signals increases their exposure. Good deal, right?But here’s where they slipped… 37signals presented this digital copy of a physical ‘dead tree’ best selling book that sells for $25 in bookstores across the country like this:
“GET THE FREE PDF”
Calling their book a “free PDF” commoditized the information inside and stripped away almost every last drop of value. People were questioning its worth, amounting it to a collection of old information gathered from the internet. Nobody wants a PDF, even if it’s identical to a best selling book.While 37signals hasn’t released any numbers, we’re willing to bet that the opt-in rates suffered by the low perceived value of their offer. How you present your product has a big effect on how it’s perceived. Which naturally leads us to the big question…
How do you increase your product’s perceived value?
Luckily this doesn’t have to be complicated. The simplest way to provide the information you already have with higher perceived value is to “upgrade” the delivery format. Let’s take a look at how that works.When we evaluate a product, we look not only at the content, but the delivery format as well. Great thing is, the delivery formats with the highest perceived value also transfer understanding much more effectively, so everybody wins.
So, higher price point, better transfer of understanding… what’s the catch?
Well, the highest perceived delivery formats take more work to create, but that work pays off because people are willing to pay more when your product provides more value.Funny thing is, we humans like to save on cost, but we hate to skimp on value. We are drawn towards value because value is what you get – price is what you pay. People will gladly pay a higher price if they believe they’ll receive tons more value in return. We have a terribly tough time selecting an option we view as less valuable when a more valuable option is on the table.Consider this: You’ll never find a manager bragging to their boss “I could have gone with the more valuable solution, but instead I got the cheapest.” If you happen have multiple price points for your info product or software it’s important to consider how you name your options.
What’s different today and hauling in the profits?
A mere 10 years ago – before video and high-speed connections were the norm – PDFs were neat, desirable items. But that decade of Internet time is like a generation in real life – PDFs have become like the cassette tapes squirreled away in your attic. They’ve got great stuff on them so you can’t bear to throw them out…but the thought of selling them is laughable and even giving them away would be an effort.Naturally, technology has improved. We’re able to transfer more data in less time, and create higher quality, more engaging, and more interactive experiences. This has skyrocketed the perceived value of courses in parallel with the technology which allows it. Engaging, interactive courses have become increasingly more valuable and people are investing increasingly more for that additional value.
Take a look at these price points.
PDF – $0As we’ve seen, a PDF is nearly worthless.
eBook – 99 cents to $9.97Look on Amazon.com and you’ll see around this range — some smaller publishers can get away with more
Paperback book – $12 to $25Books are great for increasing your perceived value and credibility, but the money isn’t in the books.
Webinar – $47 to $97No-pitch training webinars are usually a great choice, since you deliver one-to-many. You present once and collect from many.
6 Week Online Course – $247 to $997Courses delivered in video, with homework, checklists, worksheets.
The nature of your content may not have changed much in 10 years, but the breadth of perceived value for that same content has skyrocketed. This presents an opportunity to create higher perceived value for your products and expect higher revenue in return. The pricing of your product today has less to do with content and more to do with value. The difference in price between the low end 99cent eBook and the high end $997 video course with identical content is nearly a thousand fold.
Implement these 5 powerful tweaks to present your product as a Ferrari rather than a Pinto:
1) Present your content as a course
Courses have the highest perceived value of all delivery vehicles, potentially over 100 times more value than an ebook. Does it take more work to create a course over an ebook? Yeah, but nowhere near 100 times more effort.
2) Deliver content through video
The perceived value of video has skyrocketed in the past few years. Video engages your audience in multiple modalities, and is much easier to consume than reading pages of text. This makes it the perfect method for transferring knowledge.
3) Drip feed your content over time
How do you eat an elephant? – one bite at a time. The biggest reason customers never complete a course is feeling overwhelmed. It can be a daunting task to work through a large course and many people give up partway through. You want your customers to get through your content and get results. You can help reduce the feeling of overwhelm by delivering your subject matter in weekly bite-sized modules. A six to eight week course has a higher perceived value than the same content being delivered all at once.
4) Build a community so your customers become members.
We find real meaning through our connections with others. Creating a community around your product can provide tremendous value to your buyers. It’s a place for your customers to share learning experiences with those going through the same struggles they are. This also creates a natural list to sell to again in the future.
5) Position yourself as an expert
Material created and sold by an expert has tremendously more perceived value over generic material. Even a little effort towards expert status pays off in spades, quality information, solid testimonials and you’re set.
When you apply these simple tweaks to your products, you will see the difference in value that simple positioning changes can make.