Prices and Percieved Value?

themindvoid · 03-09-2009, 08:15 PM

I just got approved for a couple affiliate networks, and was comparing a few competing merchants thats relevant to my niche. One is a Big name with brick stores, that offers about 10% commission. The other is not as popular, but still ranks high for keywords and offers 11%

But the latter offers the same product for about 2/3 the price of the former, so i had assumed it would be better to promote that one.

Until i saw a comment that read " wow i couldnt't believe i was able to find it for so little, i was skeptical because it so much cheaper..."

Is it possible that the percieved value is more important, that is, one would get more conversions selling a retail item( $80) for ($65) online

versus "watching the customers wallets and offering the same item thats available for $20

What are your thoughts on thsi?

Megas · 03-09-2009, 09:03 PM

Perceived value is very important.
There are some products I've sold over the years that have actually sold much better at a higher price. the product was exactly the same but as soon as I began experimenting with pricing and increased the price, the product started selling alot more.
I think that depending on the product (of course) you should always experiment with different pricing. Perceived value is key. As for affiliate marketing,I would experiment selling for both of those and see which one sells more.

Jared Alberghini · 03-09-2009, 09:16 PM

Here's my most recent experience learning about perceived value and how powerful it can be.

I recently went to 2 different grocery stores.

The first was a "Gourmet Food" store, the second was your run of the mill, average grocery store.

The "Gourmet" food store had fancy lighting, pleasing decor, etc... it felt like a 5 star restaurant. However, most (I would estimate over 70%) of their products were the same exact brands & products that I could buy at the regular grocery store for 1/3 the price.

I'm serious... the same exact products... a can of Progresso soup was $4.99 at the "Gourmet" store, but the same exact thing was available for $1.79 at the regular supermarket.

Guess what... the "Gourmet" store was just as packed as the "regular" store... and I saw just as many people paying 3 times they should for the same product.

Perceived value is a very powerful thing.

Jared

Traffic-Bug · 03-10-2009, 08:58 AM

In Jared's example, personally I would go to the regular store because what is more important to me is the cost for the same product. But there are still people who believe in brand names and fancy hypes and would pay more for their perceived belief value or attitude. But it is up to you do A/B testing to see if the product with lower cost converts well when compared to the product with higher cost.

03-09-2009, 08:15 PM	#1
themindvoid Advanced Stone Thrower Join Date: Mar 2009 Location: New York Posts: 54 Thanks: 11 Thanked 3 Times in 3 Posts Contact Info	Prices and Percieved Value? I just got approved for a couple affiliate networks, and was comparing a few competing merchants thats relevant to my niche. One is a Big name with brick stores, that offers about 10% commission. The other is not as popular, but still ranks high for keywords and offers 11% But the latter offers the same product for about 2/3 the price of the former, so i had assumed it would be better to promote that one. Until i saw a comment that read " wow i couldnt't believe i was able to find it for so little, i was skeptical because it so much cheaper..." Is it possible that the percieved value is more important, that is, one would get more conversions selling a retail item( $80) for ($65) online versus "watching the customers wallets and offering the same item thats available for $20 What are your thoughts on thsi?

03-09-2009, 09:03 PM	#2
Megas Active Warrior Join Date: Mar 2009 Posts: 63 Thanks: 11 Thanked 4 Times in 4 Posts	Re: Prices and Percieved Value? Perceived value is very important. There are some products I've sold over the years that have actually sold much better at a higher price. the product was exactly the same but as soon as I began experimenting with pricing and increased the price, the product started selling alot more. I think that depending on the product (of course) you should always experiment with different pricing. Perceived value is key. As for affiliate marketing,I would experiment selling for both of those and see which one sells more.

03-09-2009, 09:16 PM	#3
Jared Alberghini Godson of The Godfather War Room Member Join Date: Nov 2004 Location: The NorthEast Kingdom - Vermont, USA Posts: 2,163 Blog Entries: 25 Thanks: 786 Thanked 1,065 Times in 441 Posts Social Networking	Re: Prices and Percieved Value? Here's my most recent experience learning about perceived value and how powerful it can be. I recently went to 2 different grocery stores. The first was a "Gourmet Food" store, the second was your run of the mill, average grocery store. The "Gourmet" food store had fancy lighting, pleasing decor, etc... it felt like a 5 star restaurant. However, most (I would estimate over 70%) of their products were the same exact brands & products that I could buy at the regular grocery store for 1/3 the price. I'm serious... the same exact products... a can of Progresso soup was $4.99 at the "Gourmet" store, but the same exact thing was available for $1.79 at the regular supermarket. Guess what... the "Gourmet" store was just as packed as the "regular" store... and I saw just as many people paying 3 times they should for the same product. Perceived value is a very powerful thing. Jared
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03-10-2009, 08:58 AM	#4
Traffic-Bug Senior Warrior Member Join Date: Jan 2009 Location: Oregon Posts: 1,196 Thanks: 3 Thanked 69 Times in 61 Posts Social Networking	Re: Prices and Percieved Value? In Jared's example, personally I would go to the regular store because what is more important to me is the cost for the same product. But there are still people who believe in brand names and fancy hypes and would pay more for their perceived belief value or attitude. But it is up to you do A/B testing to see if the product with lower cost converts well when compared to the product with higher cost.
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