Customer Perceived Value (CPV) is exactly what it says on the tin, it’s how a potential customer of your brand looks at your products/services and weighs up the value of those. Customers tend to prioritise factors like:
Convenience Pricing Reputation An article from Indeed.com states that:
The term attributes the success of a product/service to the perceived value consumers assign to it
The term also assumes that each customer comes to a determination following an evaluation of whether their purchases meet their wants or needs – this is then compared to the price they’re paying.
When it comes to determining a customer’s perceived value, the aim is to calculate qualitative data to add to an equivalent of the below calculation.
This article will look at how seasonality affects CPV, and what you can do to increase it.
Types of CPV Claes Fornell (one of the world’s leading experts on customer satisfaction measurement) stated in 1992 that:
Knowing where value resides from the standpoint of the customer has become critical for business, because greater levels of customer perceived value may lead to greater levels of customer satisfaction, a stronger competitive position, and, ultimately, higher market share
There is a lot to consider when determining CPV, and the following are just some of the value types that may influence how a consumer views a product:
Social Social value refers to the service offerings which contribute to the practical use to the users, or its ability to enhance social self-concept.
Traditionally, these social concepts have been generalised as “social norms”, but with the introduction of eCommerce and Social Commerce, there has been some change to what the norms are.
For the most part, social norms are derived from peer pressure, but with the introduction of social media there has been the addition of pressure from those we consider more loosely connected to us.
In Jacqueline Brown’s Journal of Consumer Research article “Social Ties and Word-of-Mouth Referral Behavior”, she states that:
Consumers are more likely to try a product if more people around them have already adopted the product
Consumers also have the ability to be both information senders and receivers through a wider range of communicative channels; such as social platforms, emails and online discussion groups (to name a few).
Functional The functional value is simply a means to deliver what a customer really wants: benefit. If the consumer believes there is a practical or personal benefit that they will gain from or if it provides a solution to their problem.
Psychological We can often make choices based on emotional triggers, that can include:
Fear Experiences, like the fear of missing out (FOMO), can trigger an intense emotional response that can escalate a purchasing decision into an ‘impulse buy’.
Trust The old marketing phrase of ‘know – like – trust’ is one to rely on, using the emotions that are associated with trust in your marketing efforts encourage customers to invest (and stay invested) in your brand.
Time Time can go hand-in-hand with many other triggers (like FOMO), setting up a time limit can speed the decision making process up. By promising your customer that if they buy within X time, they will get the delivery in Y time you can influence their purchasing decision in a positive way for both your brand and the customer.
Guilt Guilt is a powerful driving force for a consumer. Everyone experiences guilt in some way or another, and it can take a variety of forms and is an extremely dominant emotion. Guilt is a hard emotion to play on, as overusing it can be very off-putting and can greatly impact a consumer’s perceived value.
Seasonality and CPV There are certain seasonal changes where the impact on demand is more subtle than the big holidays. It isn’t enough to prepare for the larger changes that can happen but predicting any trend that may arise from seasonality will allow you to accurately forecast stock levels and tweak marketing for maximum effect.
1. Plan your budget accordingly
We highly recommend planning your budget around the seasons, and advise that brands plan their budgets early in the year. This can help brands avoid situations like getting to the end of the year only to find out they don’t have enough budget for Black Friday weekend.
2. Data decisions count
Performance of a product is key, and looking at the data behind performance is equally as important. Investigating the data to see what product performs well at certain times throughout the year will enable you to invest sensibly into that stock – use your marketing data to feed into your buying patterns for the season.
3. Stock levels are important
Ensure that you stock accordingly in preparation for any shifts in seasonality, it’s never too early to check your stock levels. Additionally, make sure your marketing and buying teams are communicating with each other to understand which products to push and when.
Increasing CPV Increasing your brand’s CPV is as unique a process as calculating the CPV itself, look at customer feedback to influence and increase it.
Listen and observe any feedback to positively implement the changes necessary to increase CPV by:
Personalising engagement Having a great user experience Pricing services/products fairly Having high quality descriptions and visuals Displaying reviews and testimonials Knowing what matters to your audience The expectations you exceed today become the ‘norm’ for new opportunities in the future – it can’t be a one-off event, but a way of life. However, you can still surprise and delight both your long-term supporters or customers while exceeding expectations. Doing this on purpose could mean that you have a deep understanding of your brand’s typical ‘way of doing’ things, surpassing this can be something really special to both your brands’ and your consumers’ best interests.
Looking at what your competitors are doing to improve their CPV can influence your own, put in the work and the outcome will be positive.
Why this is important in digital marketing A 2015 survey from Accenture found that 21% of companies pursuing digital transformation look to improving customer experience as a top priority – preceding ‘growing revenue’ which came in at 17%.
Anatoly Roytman, managing director Accenture Interactive stated that:
Customer experience is now clearly at the heart of digital transformation, and digital is at the center of that customer experience
The myriad of touch points that customers can interact with various companies has resulted in a more complex customer journey. With less control due to social media platforms dominating the customer experience scene, omnichannel management from these firms needs to be consistently excellent to stand out from competitors.
However, there is a sunny side to the apparent lack of control, and that’s the shrewd ability to take it back!
When Susan Fournier (Boston University School of Management) and Jill Avery (Simmons School of Management) wrote “The uninvited brand”, they observed that:
The Web was created not to sell branded products, but to link people together in collective conversational webs
The technology [social media] that was supposed to empower marketers has empowered consumers instead
By knowing your audience, what they engage with and why they engage with it, you can use digital marketing to heavily influence CPV. Adding value, and supplying more information on channels like social platforms can build vast amounts of credibility and trust towards your brand, and also gives you more opportunity to make the point around value.
While the customer’s perceived value is your top priority, you can also gain value for your brand. For example, a blog can improve the helpfulness of your content in accordance with trends in Google recommendations and direction of ranking system updates. In addition, good product pages should include more than just the expected 300 words of copy – images, product demonstrations, lists of benefits, all go into establishing credibility, helpfulness and improving the perception of quality and of value.
You may think your goods/services are valuable, but do your customers? They say the customer is king, and this is certainly true when it comes to them deciding the value of your brand and how it might affect their decision(s) and in turn, your conversions.