Episode #27: How Much Are Customers Willing to Pay For Your Toy?
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When you first came up with your most recent toy idea, did you stop to consider what your target customer might think it's worth? Well, perceived value is extremely important to toy industry professionals when they are evaluating your toy product. The size of the package that holds your toy, the weight of it, and the price point are all data points swirling in the minds of your target customer as they evaluate your toy and define its value.
But to effectively influence that process it's important to understand exactly what's happening. So in today's episode, The Toy Coach breaks down that process into three Value Stages and details exactly what is happening in the mind of your target customer along the way.
What is perceived value?
Perceived Value is what a customer believes your toy or game is worth when they analyze it and compare it to other competitive toy or game products on the market.
What are value stages?
Value Stages are the process by which a customer evaluates your product to eventually land on the perceived value of your product.
The 3 Value Stages:
Stage 1: Your Toy, At First Sight
Stage 2: Play Value and Need
Stage 3: Comparison
Understanding these three stages will help you make better choices when you're developing and pitching your product, to intentionally remove barriers and ideally increase sales. Ready to learn more about how to improve the perceived value of your toy idea? Listen in to this enlightening episode.
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This episode is brought to you by thetoycoach.com
Episode #1: Unlocking Your Great Toy Ideas - www.thetoycoach.com/1
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Azhelle 00:00 You are listening to Making It in The Toy Industry, Episode Number 27. Intro/Outro + Jingle 00:07 Welcome to Making It in The Toy Industry, a podcast for inventors and entrepreneurs like you. And now your host a show. Azhelle 00:17 Hey there toy people Azhelle Wade here and welcome back to another episode of Making It in The Toy Industry. This is a weekly podcast brought to you by thetoycoach.com. Before jumping into today's episode, I want to tell you all about something super special that I've got in the works. Now this is for you if you're in love with learning with me on this podcast, and you have an amazing toy or game idea that you want to create and monetize. In September I will be opening the doors for you to register for my online digital course toy creators Academy. Now if you've already joined the email list then go you! You are ahead of the game and I can't wait to serve you. When the doors open up. Toy creators Academy is going to teach you how to develop your toy ideas and turn them into a toy business. So if you'd love a little more toy spiration from me and a whole lot of guidance, then head over to toy creators academy.com and join the early access list. If you're on that list, you are going to be among the first to know when the doors open. And to top it all off, you are going to get the opportunity to join the course at an incredible rate that no one else will get not even my regular toy code insiders. So if you've got a few great toy ideas inside of you, and you want to turn those ideas into a toy business, head over to toy creators academy.com to learn even more. Okay, let's jump into the episode. For today's episode. We are going to get into the topic of perceived value of your toy ideas. I'm going to explain to you what perceived value is and why it's such an important part for you to pay attention to as you develop and pitch your ideas. We're going to talk about why and how having either too low of a perceived value or too high of a perceived value can hurt your chances of making a direct to consumer sale, or a b2b sale or licensing deal. So first things first, let's define perceived value as it relates to toys. So a perceived value is what a customer believes your toy or game is worth when they analyze it and compare it to other competitive toy or game products on the market. So it's what your customer and and remember your customer can be a buyer or a manufacturer or a parent. customer is whoever you're selling your toy or game to. So perceived value is what your target customer believes your toy or game is worth. And I really like the word believe because it's not just what they think it's what they believe based on a wide range of contributing factors, some of which you control and some of which you don't. So in order to understand just how to influence that belief, I did some thinking and analyze the process of evaluation. Now I've named it value stages for short. Okay, so let's get into these value stages. You might be wondering like, well, what is that what is value stages? Well, value stages are the process by which a customer evaluates your product to eventually land on the perceived value of that product. Now before you can inflate Once that belief, that belief of perceived value, you have to be able to understand the stages that your customer went through to arrive at that evaluation or the value of stages, okay, so there are three value stages that I identified that your customer is going to go through before they decide on what the perceived value of your product is. Now the first value stage one is your toy at first sight. This stage is the very first time your customer and now remember that customer can be a buyer or manufacturer or a parent or child. This stage one is their initial knee jerk reaction when they see your toy or your game. Now based on what they're seeing in their world around them and trends and TV, now, they'll either gravitate towards your product and based on that initial interest, they'll decide if it's worth their time. To investigate, then and only then, once they decide, yes, I'm intrigued or Yes, that looks cool or Yes, you know, I'm a kid and I love Polly Pocket. So I'm in. Once you get that very first Yes, on stage one, your products perceived value jumps up and your customer moves on to stage two. Now in value stage two, if your customer has that initial interest, they pick up your product and you've gotten them into stage two, you're like 33 point 33% of the way there. Okay, so during stage two, your customer is analyzing your toy or your game, and they're trying to figure out what it is and how it works. What does it do? How does it do it? This stage is where every customer whether they realize they're doing it or not, and Remember what your customer is that's a buyer manufacturer or parent or child, whether they realize it or not. They are analyzing play value, and they're analyzing their need for the toy or the game product. So they're deciding if they need that particular product in their store, in their showroom in their home, or if they're a kid in their toy box. At this stage, a buyer might be looking at their assortment of products and saying, Yeah, you know, I'm missing like sandar from my assortment, or a parent might be saying, you know, I'm missing a gift for my niece's birthday and she loves crafts, or a child might just be thinking, yeah, I'm pretty sure I don't have this Greencastle and green is my favorite color, so I need it. But whatever that thought processes, stage two is the most important value stage to all. Come. Once you get that second Yes, in stage two, your toy or game product moves onward in your customers mind, the value rises, and they go to stage three. So let's say you've made it to value stage three, so you're more than halfway to a sale. But the trouble is that while value stage three is the most important stage, it also tends to be the most overlooked stage by excited toy inventors and entrepreneurs. So why is that? Well, that's, that's because sometimes when we're so excited about our crazy new inventions or product ideas, we forget to do something really important. And what is that that is, we forget to compare our product ideas to the rest of the market. And that is where the third value stage is comes in. That's what this is all about. About the third value stage is the comparison stage. This is where your customer is actively. Now it's no longer latent. They're actively comparing your toy or to other similar toys on the market. And depending on your customers motives, this comparison could be as simple as you know if their child like this toy is my favorite color, and the other isn't too as complicated as which can offer me the highest margin, you know, taking into consideration the mechanics of the toy and the royalty rate of the inventor. So, if your customer your target customer says yes, this toy or game product is better than the competitors, and it's worth my money to buy it or buy into it. And if your customer makes it all the way through this stage, and it's still interested in your toy or game product, Then you have really done all you can do for a successful sales pitch or self shelf presence. Or if you maybe have your products and an online store, you've done everything that you can possibly do to present your product in the best light. Now getting a yes in stage three is really as good as a guaranteed sale. But keep in mind, there are a lot of factors that influence the value stage evaluation process. To get into some examples, like you can't control if a parent is about to hit the buy button when their doorbell rings, or if a buyer is about to send an order form when they're suddenly called into an urgent meeting. Now you can't control those situations. But there are a lot of other ways that you can take control of this process and influence the perceived value of your product to your target customer. Ignoring perceived value and not understanding the stages, the value stages of evaluation could lead you to wasting so much time investing in in advertisements and, you know, trade shows or nurturing leads to only have eyes land on your product that and see it as either suspiciously undervalued or grossly overvalued and lose you that sale. So, like I said earlier, we're going to talk about how to influence your choice perceived value throughout this value stage process that I just outlined. We're going to get into how you can influence certain parts depending on the stage. So let's get into that a little bit. Going back to value stage one, your toy at first sight stage, and let's talk about how you can influence your products. perceived value at this stage. Now, this stage is probably the one that's the most left up to chance. Because this stage has so much to do with the personal influences and interests and experiences of your target customer. It could be what they saw earlier that day that influences them to take interest in your product, their favorite color, but let's imagine that your target customer in this instance, is a buyer and they are looking for STEM science kits. And let's say that in this scenario, you know that they're looking for this either because you've spoken with them directly before or maybe your sales rep has let you know. So what you can do to get past value Stage One is to make a point to call out stem, you know, science kits either on your packaging of your product, or if your packaging already done, maybe you just call it out on your cell phone. sheet in a way that the buyer can't miss it. You could also take it a step further knowing that everyone puts stem on their kids and not everyone explains why their kids are STEM related. You could take it a step further and explain why your product deserves that categorization and getting clear on what it teaches kids and how in and doing that in some sort of short form graphic way because keep in mind stage one is that your toy at first sight right we're looking for quick glances quick conversion a quick Yes, I'm interested in I want to know more. Okay, so let's look at another example. Let's imagine that your target customer is just a child, a child going through a store and looking at a bunch of different toys they may or may not be interested in. And that child for some reason does not like the color blue at all. And in this scenario your product is just like totally blue. It's just you got blue gradients and like blue fonts, just essentially your product is just an ocean of blue. Okay, so there's nothing you can do about grabbing the attention of that child in value stage one, but you really shouldn't let that idea that someone may be turned off by, you know, the visual design choices that you made of your product because they have a very specific, you know, agenda against a certain color, you can't make a product to fit everyone's needs. But I just want you to understand that there are some instances in values in value stage one, where you can make changes to influence how your product is getting perceived and how the value of your product is perceived. But there are some instances where you simply can't make those changes. And that is okay. You just have to be able to recognize that those potential customers that don't make it past the very first stage of evaluation of your toy product, they're not the ideal customers for you, they're not going to understand your product and they're certainly not going to give it the value that it truly deserves. Okay, now let's get into the ways that you can influence the value perception of your product during value stage two. And remember, this is the stage where your customer is determining the play value and the need for your toy or game product in their world. So how can you influence this? How can you help improve the value perception of your product when they're at this stage? Now this is all about positioning. You want to make sure that your toy is showing up in front of the parents that wanted the buyers that have the gaps in their store to fill and in front of the manufacturers that need your type of innovative And when you show up fulfilling a need, it is extremely important that your sell sheet, your product pitch, or your online store explains that your toy or your product is fulfilling that very specific need. I don't want you to assume that let's say because you have a stem kit, the buyer will say, oh, wow, yeah, I'm like, totally realize that this is a stem kit, you want to drive that point home, if you already know that's what they're looking for, you need to make sure that it's clear that your product is fulfilling their needs. So to take control of the stage, you got to fully understand the needs of your target customer. You have to be able to predict the questions that they are going to have about your product, and you want to answer those questions as quickly as they can think of them. So let's look at this. If you have an online store Let's say you're selling a finger painting kit for preschoolers. So thinking about the parents of preschoolers, you might want to use language like non toxic washable finger paints approved by parents like you. Assuming that that type of language is true about your product. It shows that you understand the needs of these parents. So they want to give their kids the freedom to play with colorful paints, and they want to give them the freedom to finger paint, but that they are worried about safety and they are worried about the cleanup of the craft. So if your customer in this case is apparent, searching for a paint set, and they've made it past stage one where they're already they know they're looking for a paint set, you're that paint set, they're interested, when they go deep enough to dig into investigate the details of your product. You want to make sure that those product details are Jumping to answer their deepest concerns, that's non toxic, that's washable, and that's approved by parents like you. Okay, so one more example, let's look at this from the angle of an inventor. Let's say you're pitching your toy invention to a manufacturer. Now, if they have past stage one, you know, they're interested, maybe they first saw the first couple of slides of your presentation or seconds of your video presentation. And they're listening. They're interested in to see what you have to say, you know, you've got to know that there major questions are going to be, you know, how does this product work? I'm interested in it, but how does it work? And then their questions going to be like, do kids even like this? How can I be sure kids like this? And you can answer those questions in succession and in a timely manner in your product. Like pitch PowerPoint or in your product pitch video. So making sure that you answer these questions as quickly as possible allows your target customer in this case, a manufacturer to get out of their head and back to absorbing the content and the invention that you're showing them in the presentation. You don't want them sitting there the whole time wondering and worrying, maybe clicking out because it takes too long to find answers to those questions. You want to feed answers to those questions right away. So they have no more objections, and they can get back to enjoying you know, the the, the product that is your invention. Now, I hope that those two examples really help you understand how to take control and influence the outcome of the second value stage. Because once you get to yes, here you are just a hop, skip and a jump away from like a sale, a wholesale order or maybe even a license. Same deal. So now let's take a look back at value stage three. This is the comparison stage. And I want to talk about how you can influence what is the most important stage in the game. Now, you should really honestly be making efforts to influence the outcome of the stage throughout your toy product development process. And the way that you do that, and I've described this in many episodes before is with constant evaluation of the market and of your competitor. That includes just keeping records of the products that your competitor releases, and the features that those products have the price points they sell it for. Honestly, you should even be comparing the prices and features of your competitors toys on different platforms and at different retailers and noticing if there are shifts or changes In between them. Now, let's get into how to adjust your website or your sell sheet or your product, PowerPoint pitch to influence whether or not you get a yes at stage three. Now, number one, and probably probably the most obvious thing to do is to either raise or lower your product prices. But only obviously, if you have reasonable room in your margin to do so you don't want to sell at a loss just to be competitive. I mean, unless that's like maybe part of a longer term plan that you have to reduce maybe your pricing and manufacturing costs overall. But if you see that your competitors are offering the same thing as you at a lower cost, then you can choose to opt for the simplest solution and just you know, lower your costs. lowering your costs are going to alleviate the most basic worry that your target customer may have when they get to stage three, and they're comparing Because they don't want to pay too much money for essentially the same toy or game product. But if lowering your cost isn't an option, and that's totally cool, it's good that you price your product where it needs to be. Another option you can do is you can explain why sales copy that conveys the value of your brand can influence the perceived value of your product, especially when you're conveying that value over other similar brands. That kind of copy can help convince a customer that your competitors product is actually underpriced and therefore inferior. Now at the same time, what do you do if you realize that your high end high quality product is priced too low? Well, if your product is intended to show up as high end, but for some reason, I mean, maybe do To like an overvaluation in the market, or just a high demand for your type of product, maybe in your category, maybe you find that your competitors prices are higher than yours, you may consider doing one of two things. And this is if they're considerably higher than yours, right? So you may consider raising your prices a bit just to be on par. And also pad yourself with a bit more margin. Or and I prefer this option, you could explain in your product description why your product is more affordable. is you know is that reason? Because maybe you found just a more affordable factory in another location. Do you do maybe more legwork on your own and pass some of that savings on to your customers? Or do you have a simpler packaging solution? Maybe You're using less plastic and more cardboard. If you explain why your product seems to be out of line with your competitors, it can help ease fears that your seemingly high product high quality product may in fact be lower quality due to its lower price point. Now connected to this idea of price point, I have to talk about packaging sizes. So when we're talking about products as they are perceived in store and on shelf, I know a lot of my examples have been online just because we're in the time of COVID. And there's not a whole lot of in person shopping compared to online shopping. But when we talk about products in store, and on shelf, you've got to know that customers are always analyzing the weight of your product and the size of the box. It's in. Now when it comes to Customers such as parents and kids, that analysis is more than likely, kind of, they're not doing it intentionally, it's an unintentional analysis that they do product or product. But when it's coming from retailers and manufacturers, it's a very intentional analysis of value because they don't want to have a barrier. For a customer coming in purchase that item, they don't even want the chance that they might think that if the box is a little bit lighter, it's not worth the competitive this the same amount of money that the competitor product is. Now in some cases, for some retailers, the heavier the box and the bigger box, the higher its perceived value. But for other retailers, the exact opposite is true. And if you're selling online, it's very much the exact opposite, because the smaller boxes are going to get you lower shipping rates. So it's important that you do some research and that you get To know what your target customers are expecting for whatever your price point is, when you do your research shopping trip and you know I said again, I talked about that in Episode One, you want to pay attention to the correlation of the price point of a toy, and the size and weight of its box. Now, I want to give you just one more suggestion in this area for influencing product perception. And you can do that really easily through lifestyle imagery and copy. So lifestyle imagery, high quality, lifestyle imagery, maybe that you take yourself not just Shutterstock imagery where you Photoshop in your product, and, and lifestyle copy, sometimes called like romance copy, conveys the positive feeling that your customer is, is kind of being guaranteed to get As a result of purchasing your product, so that imagery could be happy kids playing with your product. And it could be copy, like, give a gift we'll never forget this Christmas. Now that imagery and that copy can live either on a package. So that's for an on shelf product. And it can be on that package as product image as your main product image or as some descriptive text that comes out in a burst, or that can be on a website as like a header image on a product page, and then a product description. Now I'm really sure that all of these tips are going to help you influence that the final value stage stage number three, which is comparison, so that when your customer is going through and analyzing your toy or game product compared to your competitors, that you come out on top. Now what I want you guys to take away from this episode is a better understanding of perceived value. And I really want it to affect your toy product development process and the presentation and pitch process of your toy ideas. I want you to remember the process at what your, what your target customer is analyzing your product, and use the understanding of this process to improve your pitches and maybe even improve your product. So remember that stage one, it's your toy at first sight? How does it make them feel? stage two, value and need for your toy product? Do they need it? Do they see the play value in it? And stage three? comparison? How do you stack up against your competitors. And remember, while you can influence your target customers evaluation of your product at every stage with small alterations, the most important stage that I want you to focussed on throughout the entire toy development process is stage three, comparison. And that is because that is just the hardest stage to adjust to when you already have a completely finished product. To do that you're looking at your competitors products and evaluating products features. price point box size box weight. If you want to get really intentional with defining your price and box size of your toy idea, consider just going to a retailer measuring out their shelf space, measuring competitor product and making sure that your box is designed to fit the needs of the buyer of that retailer or of the customers that shop there. You can even take it a further step and mock up your toy idea or if you already have a package sample, take that sample police it on on the shelf at a retailer and just visually evaluate how it matches up against your competition. does it stand out? Does it blend in does it not fit in at all, you'll get some really valuable insights just by really seeing your product on shelf. That's all I have to teach you today about perceived value. Now as a thank you to my listeners, I am going to start highlighting toy products and podcast reviews of theirs during my episodes. For today's episode, I am highlighting an iTunes review from Jeremy Stanford. Jeremy says that this podcast is very informative and well crafted. I've listened to all of the episodes multiple times and learn something new each time. I highly recommend subscribing if you're interested in creating a new toy. Also, please check out the middie Facebook group. Thank you so much for that wonderful review Jeremy and you guys heard it from him. Not me join our Facebook group, you'll be able to find the link in the show notes. And remember if you have an idea for this podcast send it to me I take podcast topic suggestions all the time over at the toy coach comm just scroll down, hit the button that says podcast topic suggestions. And believe me, I listen. I have been hunting down experts and doing all of this research to make sure I answer all of the questions you have already been sending me. So keep them coming. And thank you so much for listening to today's episode. I know you have so many options of podcasts that you can listen to. So it means the world to me that you chose to listen to this one. I would love it if you would subscribe to this podcast if you haven't already. And leave us a review on iTunes. I get email alerts when there's a new podcast review and it just re energizes me to keep providing valuable content for you. Each and every Free week. Also you may hear your name and review on the show. So until next week, I'll see you later toy people. Intro/Outro + Jingle 31:09 Thanks for listening to Making It in The Toy Industry podcast with Azhelle Wade, head over to thetoycoach.com for more information, tips and advice.
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🎓Learn more about how you can develop and pitch your toy idea with Toy Creators Academy® by clicking here to visit toycreatorsacademy.com and join the waitlist.