I love the headline from this Bain & Company article. Largely because for years I have banged on about managing perception, as well as managing reality, in any service operation you might run. For instance, one area that this is most evident is in queueing. My research (and that of others) consistently demonstrates that customers perceive that they wait in line longer than they really do. In managing queues you can therefore improve performance by changing their perception, without changing actual waiting time (see pages 208-209 to see how you might do this).
Bain & Company argue that the same is true with regards customers’ perception of prices. This is especially important if you are operating in a highly competitive environment and/or have adopted a low cost strategy (page 376). In the article, 15 tactics are proposed for improving customer perception of price.
Of course we all know that customers do not buy on the basis of price alone – they make a value judgement.