The Egg McMuffin of…
We’re all familiar with those wonderfully tasty little morning sandwiches from none other than low cost restaurant leader and fast-food chain, McDonalds. Egg McMuffins are conveniently available via drive-thru or walk-up, filling for even the heartiest of appetites, and inexpensive enough to relieve most (OK, maybe just some) of the guilt upon completion. But, a premium breakfast treat? (scratch head here)
The recent McDonald’s TV commercial for the Egg McMuffin positions it as a premium quality product, one that’s close to, if not actual, perfection, and satisfying in every sense, much like the perfect boyfriend, car and/or apartment, to name a few cited comparisons. In the commercial there are several scenes accompanied by someone speaking “(It’s) The Egg McMuffin of (insert anything here)” to give the viewer the sense that it is associated with perfection, quality and achievement. I suppose it’s a play on the old saying “It’s the Cadillac of (insert any product or service here)” from years past which associated whatever you put into those parentheses with high quality, class and the utmost in unspoken respect. Speaking of which, there is a Cadillac in the commercial to make the messaging that much more intentional. The commercial immediately changed my perception of the Egg McMuffin’s value. I grew hungry and started to think of the Egg McMuffin as an alternative to satisfy. You know, I’ve never had a bad one. They’ve always been pretty consistent and measured up to my expectations for what they are. But now I was viewing them in a different way. Not because the bread, meat or egg was promoted any differently but because McDonalds now gave me the impression that it was premium. In other words, what McDonalds (or rather their advertising agency) did with that commercial was change my perception of the product value by placing it next to other premium products. They did this very intentionally and did not hold back. In doing so, they created new demand. Pretty cool stuff.
So, what kind of product or service level of value do your customers perceive you to deliver? Is it the Cadillacs of all (plumbing, legal, housecleaning, or other) services? Or is it the WalMart of products? How do you want your value to be perceived? Does how you position your brand create more demand and/or add value?
Perceived Value, Explained
Perceived value according to BusinessDictionary.com is defined as a customer’s opinion of a product’s value to him or her. It may have little or nothing to do with the product’s market price, and depends on the product’s ability to satisfy his or her needs or requirements.
Investopedia further defines perceived value as the worth that a product or service has in the mind of the consumer. The consumer’s perceived value of a good or service affects the price that he or she is willing to pay for it. For the most part, consumers are unaware of the true cost of production for the products they buy. Instead, they simply have an internal feeling for how much certain products are worth to them. Thus, in order to obtain a higher price for their products, producers may pursue marketing strategies to create a higher perceived value for their products.
Investopedia explains ‘Perceived Value’ by referencing perfumes which tend to be associated with a glamorous celebrity in order to create a mystique and perception of luxury. Alternatively, they may be the subject of elaborate and expensive advertising campaigns to create a strong image for the perfume. Consumers commonly do not realize that the costs of production for perfumes are relatively low. Thus, while the cost of production for perfume may be only a few dollars, the perceived value of a perfume can be far greater.
Therefore, you can have a product or service that doesn’t cost you much to create or provide it yet if it is perceived by the customer as premium, you can command a greater price and therefore higher margins.
Increasing Perceived Value
So, if you’re into making more money on higher margined products or services and think that by increasing perceived value is the way to do it, check out the following few tips I aggregated from various sources, for you to consider:
- Promote excellent results. Include several testimonials, success stories and references in your marketing which will act as actual proof that your product or service is satisfying others’ needs and over-delivering on value
- List several benefits in your marketing as it gives people the impression you’re solving several problems with your solution and is well worth the costs
- Give people a strong guarantee and show you stand behind your products. Briggs and Riley bags offer a lifetime warrantee. I travel a lot and wear my luggage. I’ve had to bring my bag in for service several times. Each time it’s fixed expeditiously and sent to me via fed ex at the company’s expense. I’ve saved buying five bags because of this and will always recommend and buy Briggs and Riley for their high quality and perceived value.
- Simply sell your product at a higher price. Where this increases the perceived value of your product or service as most people associate higher priced products and services with higher value, it does come with risk, so be cautious in doing so.
- Get your product endorsed by a famous person. This increases the perceived value because people think that famous people wouldn’t want their name associated with a poor product. Look at Beats by Dr. Dre headphones that are currently selling off the shelves. The quality of those headphones are not as great as Etymotic or Shure but the endorsement has propelled the perceived value of the $300 headphones which has resulted in exponential sales growth.
- Make customers an offer they can’t refuse with a no-risk offer such as a limited trial, free sample or some other incentive to get them to try the product. Think of the free samples of perfume and cologne that are given out at retail.
- Promote the value of YOU: The more of an expert and/or important person you are in the field the more valuable your service or product may be perceived. Be sure to list academic achievements, awards, associations and articles written by you. Always present yourself as if you are very successful.
- Explain the behind the scenes value of the people and processes that help make up your product or service. Be sure to mention the quality employees your firm hires and the standard of work they are held accountable to. Don’t forget to mention the research and development your company does to use only the best products and/or the vendors and how they are chosen.
At the end of the day perceived value is exactly that—perception. Be sure to avoid creating a false sense of value. Instead, be sure to focus on your unique value and the benefits that you can provide to minimize your risk when attempting to increase the perceived value of your product or service. Who knows, you may soon become the Egg McMuffin of your industry.
- Dotson, Larry, “10 Ways to Increase the Perceived Value of Your Product,” eBookApprentice.com
- Gregory, Alyssa, “How to Increase the Perceived Value of Your Services,” Sitepoint, November 17, 2010.
- McPheat, Sean, “Three Ways to Increase Perceived Value During the Sales Interaction,” the MTD Sales Blog, June 29, 2011.
About the Author
Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Florida and New York since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and teaches Marketing at New York University where he has for over six years. He has been quoted and/or featured in USA Today, Mobile Marketer magazine, Mobile Commerce Daily, Luxury Marketing magazine, BNET TV and Business Currents magazine, to name a few. For more information or to learn more, email him at abiasismartmarketingllccom, visit www.smartmarketingllc.com, call him at 239.963.9396 and follow him on Twitter @angbiasi.