What about perceived value?

Yesterday I was speaking with a client about pricing a new online service. The client kept referring to the “perceived value” of the service if he charged more than his competitors.

Let’s say we have two items and one is $69 bucks and the other is $99.
They are both almost identical yet many people would opt for the more expensive item simply because they perceive that the higher cost must mean it’s a better product.

Here’s my take on it when it comes to pricing your own stuff:

Don’t play the price game.

If your position is to beat your competitors based on being the “cheapest,”  I think you’re going to lose.  However, if you play the price game and believe that by charging more for your product and hoping to justify it based on  “perceived value,” then you’re also losing.

Play the game like this:

Develop an awesome product or provide amazing service and then you can charge whatever you want. Your customers won’t need to perceive anything except your product or service being a true bargain even as the highest priced option.  You can justify being the most expensive because you’re offering actual value as opposed to perceived value.