What is Customer Perception?
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 11, 2022
What is Customer Perception?
In general marketing terms, customer perception refers to customers’ awareness, their
impressions, and their opinions about a business and its brand, along with its products and
services. Customer perception can be shaped by both direct and indirect interactions with a
brand’s offerings — it’s not entirely dependent upon marketing or upon the inherent quality
of the product or service itself.
It may seem difficult, then, to control customer perception. While control might not
actually be possible, there are several ways to influence how customers view companies
through brand market research.
Customer behavior and perception of brands is not in all actuality driven by logic —
from negative brand associations, to positive or even sentimental brand attachments.
According to Harvard professor Gerald Zaltman, 95% of purchase decisions are
subconscious. Remember that commercial jingle for an iconic software brand you grew up
hearing on TV? It probably left a lasting impression on your young mind, and in turn given
you a brand perception that is hard to let go of.
The intangible concept of customer perception is often at odds with the tangible effect
on business outcomes, as customer perceptions of a company’s products or services can
have a serious impact on the long term viability of a business’s offerings. Just ask any
insights professional at Disney, a company that takes the motto “make people happy” very
seriously by listening to the voice of the customer to improve its offerings.
According to the Harvard Business Review, emotional connection to a brand is the key
to long term business outcomes. Customers that have developed a bond with a business are
in fact more valuable than highly satisfied customers; these customers, described as “fully
connected” are actually 50% more valuable than the average customer. Therefore, if brands
can win people over by forming emotional connections with them, brands can be highly
influential in swaying customer perception.
How can brands form emotional bonds with customers if they do not understand them
on an emotional level? By looking beyond customer survey data or online behavioral
analytics, organizations can drive strong customer connections by speaking directly with
them through brand market research, gaining valuable context on people’s motivations,
current lifestyles and a range of other factors that shape their emotions, perceptions, and
future decisions.
Why is customer perception important?
Perception does more than impact each individual purchase, it shapes the long-term
relationships between customers and brands. This is often reflected in customer retention
rates and the ability for brands to continue receiving relevant feedback and intelligence
from their loyalists. Because of the importance of customer perception, every touchpoint
between a company and its customers should strive to affect customer perception in a
positive way.
Brands must also understand which elements have the broadest and most profound
impact on customer perception. These elements can be both tangible and abstract, but each
has the potential to be shaped by insights, CX, and UX professionals.
Some tangible factors that influence customers’ perceptions include:
Price: Pricing a brand’s offerings should always be part of a comprehensive business
strategy. However, it must be understood that context impacts customer perceived value
(CPV) — lower prices are not always better, as any modern art dealer can ascertain.
Quality: Quality can apply to multiple attributes in a product — attributes whose
importance can differ from customer to customer. Marketers should understand what
feature most distinguishes their products or services, and which are most desirable in target
markets.
Branding: Logos, artwork, and even packaging all deliver a message about a
company and its brand. Marketers should ensure these elements meet and exceed
customers’ expectations, helping brands stand above others.
Service: Service quality will make or break customer perception, where even
companies with superior products can lose business if customer support operations are not
in place. Customers are more likely to write online reviews after highly positive or highly
negative service experiences, which can improve or exacerbate brand awareness.
Some less-tangible factors that influence customers’ perceptions include:
Advertising: How marketers deliver messages about a company, as well as the
outlets they choose, can drive customers in both positive and negative directions.
Reputation: Brand reputations are built over time and can be quite durable. They are
formed from customer experiences with products and services, but also secondary
interactions from third-parties (i.e. media coverage). While marketers attempt to measure
their reputations online, sudden events can impact reputation without warning.
Influencers: Influencers are people that customers trust, and are among the biggest
factors impacting customer perception aside from the customer’s own personal experience.
Customers that have firsthand experience with a product, service, or brand are most likely
to sway other potential customers during the organizing stage.
What are the stages of customer perception?
To understand customer perception, researchers must first uncover insights into the
customer experience (CX) and how it impacts customer perceived value (CPV). While many
brand leaders understand the value of strong CX, customer experience quality continues to
fall, having shrunk for 19% of brands in 2022 according to Forrester Research.
A number of factors can contribute to this downward CX trend — outdated ecommerce
sites, labor shortages, etc. Whatever the reasons, it is apparent that many business leaders
are growing more disconnected from their customers, and are failing to prioritize making
people’s lives easier with their products and services. As a result, they are losing even more
influence over customer perception.
CPV, or the importance ascribed to a brand’s offerings in terms of how much they are
willing to spend on it, is equal to a customers’ perceived benefit minus its costs. Striking a
balance between price and value is not an exact science, but it requires a large sample of
context-based customer feedback using qualitative research methods to better understand.
Engaging with customers at scale not only brings organizations closer to understanding
their customers, but it helps develop customer empathy across the business. With these
objectives in mind, organizations can understand the phases of the customer perception
process.
The three stages of customer perception include:
1. Sensing: Characterized by the physical senses, customers use this stage to
accumulate ‘knowledge’ about a product, service, or brand through physical sensations such
as visual impressions, touch, sounds, and tastes.
2. Organizing: During this stage, customers make sense of the information they’ve
attained, interpreting its value based on context, personal beliefs, perceptions of
themselves, and other highly subjective factors. At this stage, customers will categorize the
object of their critique and compare it to other objects within their chosen categories. For
example, a consumer hoping to buy a winter coat may prioritize coats by price, but also
color and thickness, during the organizing stage.
3. Reacting: Customers will act based upon the sensing and organizing stages; in
addition, they are influenced by internal and external stimuli ranging from personal history
to online reviews. Although each reaction and its contributing factors are different, buyers
tend to experience similar processes of evaluation before making their decision.
How to Understand Customer Perceptions
Understanding underlying motivations of consumer behavior through qualitative, brand
market research is a strong method used by business leaders to influence customer
perception and boost sales.
Brands have some ability to measure customer perception quantitatively, but this data
is best understood and more profound when explaining it from customers themselves.
Having conversations with customers helps to illuminate customer perceptions by probing
and clarifying sentiment to uncover the heart of the ‘why’ behind their perceptions.
Discuss makes it easy for organizations to connect with customers and quickly turn their
experiences into insights. Learn more about how to leverage qualitative research to improve
CX with our infographic: “Using Customer Feedback for Customer Journey Pain Points.”
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