Perceived value vs. cost
When it's time to present the price of your course, it's essential to frame it in a way that reflects the value your students will receive rather than the cost of purchasing it. That distinction alone can make or break your pricing strategy.
Lesson aim
By the end of this lesson, you'll understand the difference between perceived value and cost, and how that should influence your pricing strategy.
Value vs. perceived value vs. cost
So, what’s the difference between value, perceived value, and cost?
-
Value is the worth of your course to your students.
It’s the transformation they’ll experience, the knowledge they’ll gain, and the skills they’ll develop. It’s the reason they’re willing to pay for your course in the first place. -
Cost is what your students need to give up in exchange.
If the value is the upside, the cost is the downside. This is the money they’ll spend, the time they’ll invest, and the effort they’ll need to put in to extract the value from your course. -
Perceived value is the value your students believe they’ll get.
It’s not just about what you say your course is worth—it’s about what your students think it’s worth. And that’s where things get interesting, because perceived value can be influenced by a variety of factors.
Why is it so important to anchor to value?
Value is the reason people buy, while cost is the reason people hesitate. When you anchor your price to the value your course provides, you’re a lot more likely to make the sale. The best way to illustrate this is with a few examples.
Example #1: Selling a car
Someone comes to your dealership looking for a new car. They’re considering a new job that would pay more but require them to commute further, so they need a car. You show them a car that fits their needs perfectly, but it’s a bit more expensive than they were hoping for.
- ❌ If you focus on the hit to their savings (cost), they’ll hesitate.
- ✅ If you focus on the value of being able to take the new job, they’ll buy.
Example #2: Selling a croissant course
You’re selling a course on how to make perfect croissants. Your potential student loves the idea of learning to make them, but they’re hesitant because they’re busy and don’t have a lot of time to spare around work and family commitments.
- ❌ If you focus on how long the process takes (cost), they’ll hesitate.
- ✅ If you focus on the feeling of sharing perfect croissants with their family, they’ll buy.
Example #3: Selling a productivity course
You’re selling a course on how to be more productive. Your potential student is struggling to keep up with their workload and feels like they’re always behind.
- ❌ If you focus on the number of hours the course requires (cost), they’ll hesitate.
- ✅ If you focus on the value of being able to get more done in less time, they’ll buy.
Example #4: Selling a weight loss course
You’re selling a course on losing weight. Your potential student wants to lose weight and feel healthier, but they’re worried about how much work it’ll take and how much they’ll need to deprive themselves of their favorite foods.
- ❌ If you focus on the restrictions they’ll need to follow (cost), they’ll hesitate.
- ✅ If you focus on how good it’ll feel to fit into their favorite jeans again, they’ll buy.
Example #5: Selling a personal finance course
You’re selling a course on managing personal finances. Your potential student is struggling with debt and wants to get out of it, but they’re worried about the cost of the course.
- ❌ If you focus on the cost of the course, they’ll hesitate.
- ✅ If you focus on the value of being debt-free, they’ll buy.
The 5 ways to increase perceived value
So, how can you increase the perceived value of your course?
1. Focus on the transformation
Your course isn’t just a collection of videos and worksheets—it’s a journey that will take your students from where they are now to where they want to be. Focus on the transformation they’ll experience, and you’ll increase the perceived value of your course.
2. Reduce perceived risk
People are naturally risk-averse, so anything you can do to reduce the perceived risk of buying your course will increase its perceived value. This could be offering a money-back guarantee, providing testimonials from satisfied students, or offering a free trial so they can test the waters before committing.
3. Increase the likelihood of success
If there are two identical courses, but one promises personal support until you reach your goals while the other simply provides the course materials, the former will be perceived as more valuable. Anything that improves the odds of success will boost value.
4. Increase the perceived quality
We’ll assume your course is already high-quality in itself, but there also ways to frame it as more of a premium product. This could be through the design of your sales page, the quality of your course materials, or even the price itself (high-ticket items are often perceived as more valuable based on their price alone!).
5. Increase the perceived scarcity
Are you the only expert who teaches on this topic in this specific way? Is your course only available for a limited time? Is it normally very difficult or expensive to get access to your expertise? Your potential students will increase the perceived value of your course in their minds if your messaging hints at this kind of scarcity.
How to communicate value over cost
Now that you know why you should anchor your price to value, let’s talk about how to do it.
Pace your sales message
When you’re selling your course, it’s important to pace your sales message so that you’re building up the value before you reveal the price tag. This way, your potential students are already sold on the idea of your course before they see the cost.
Remember 💡
Your potential students will only see the price as a barrier if they don’t understand the value first.
Surround the price with value
When you do reveal the price, make sure you’re surrounding it with value. This could be by reminding them of the transformation they’ll experience, the support they’ll receive, or the quality of the course materials.
Remember 💡
The price should clearly be framed as a direct exchange for the value they’ll receive—“for the price of
$$$X, you’ll get closer todesired outcome.”
Use value totals to justify the price
If your course is a high-ticket item, you might want to break down the value your students will receive into smaller chunks. This way, they can see that the price you’re asking is actually a bargain compared to the value they’ll get in return.
You’ve probably seen this in action before:
Example
“Weekly coaching calls with me? Usually valued at
$800. Feedback on your assignments? Usually valued at$500. Access to a mastermind of other high-achieving students? Usually valued at$1,000. But this course gives you all of that for just$497.”
Future-pace the value
Future-pacing means painting a picture of what their life will look like after they’ve completed your course. This could be through testimonials from past students, case studies of successful transformations, or even just a vivid description of the benefits they’ll experience.
Remember 💡
The more vividly you can paint their ideal future, the more they’ll be willing to pay to get there.
Key point → Price based on perceived value
When you anchor your price to the value your course provides, you're a lot more likely to make the sale—and if you can increase the perceived value of your course, people will be willing to pay more for it.
Next steps
Next, we'll explore how to define your course's unique value proposition to make it easier than ever to anchor your price clearly to the value your course provides.