Why my Dad never pays for his coffee...

Now, before I start I feel I should explain that my father, Mike, isn't a thief.

But he is a smart man who understands the psychology behind perceived value.

You see, whenever he goes to get a coffee from his local chain coffee shop, he stops at Poundland first.

He'll grab the biggest, best box of chocolates he can get for £1, before heading to the coffee shop.

And, as he places his order with one of the staff he knows, he hands over the chocolates.

"Here, I picked these up for you all to keep you going!"

And, without fail, the gracious recipient decides that it would be too terrible to even consider charging him for his coffee, after such a feat of generosity.

So instead of paying an eye-watering £3 or £4 -  the going rate for a coffee nowadays - he pays just £1.

It's a perfect example of the way perceived value can influence transactions.

Increasing the perceived value of your product or service is a smart thing to do because it enables you to charge more without increasing your costs.

If you're stuck on how to implement this into your business, get in touch and I'll see if I can add some value.

P.S. I feel I'd be doing my dad a disservice if I failed to mention that he started buying chocolates for the staff before he realised they'd give him free coffee in return - and he doesn't take the chocolates back if he doesn't get his freebie!

Nick Fisher