Perceived Value versus Actual Value

Later this week I’ll be traveling to Berlin, Germany and then to Dublin, Ireland.  I used to travel a lot, so that’s not the exciting part — in addition to being excited about meeting co-workers and being together to work as a team, I’m also looking forward to racking up points on my Marriott Card and also on my Delta Sky Miles — Yes, you’ve got it right: I’ve fallen for the most obvious marketing ploy — I’ve fallen for the Perceived Value versus the Actual Value Strategy.

To me, the perceived value of becoming a Gold Marriott Rewards member is kind of exciting (I’m just a few stays away from Gold).  Yes, I need to get out more but, seriously, I’m pretty stoked about it.  What benefits do I get from becoming a “Gold Elite” Member — I have no idea.  But, it sounds cool.  I have a ton of points already, which means that I could stay at any Marriott Hotel for, probably, 2 weeks for free.  The free stay at Marriott is beside the point — I’m talking about the “Gold Elite” designation — now that is rewarding.

In all seriousness, how have I, an otherwise non-gullible person, to fall so heavily for these reward ploys like Marriott Rewards and the Delta Sky Miles?  It’s an old marketing strategy that works well and, boy, has it worked on me.

The perceived value here is two-fold:

1. First, there’s a social aspect of the “Gold Elite” designation, as if I belonged to some special club of special people.  In all reality, I really belong to a club of people that, pretty much, live in hotels.  Who wants to belong to a group like that?  When you step back from the hype, the hotel-fancy-rewards group is really not a group anybody wants to be a part of — it’s a group of people that live in hotels, which is not really cool, fancy, or a club that anybody should ever want to be a member of.
2. Second, the points — the part that has value insomuch as those points can buy free stays, requires that one stay at Marriott several times until one can qualify for a free stay.  The first free stay occurs at 17,000 points, which means that one, on average, has to spend about 21.5 nights, assuming 800 points per stay.  Let’s further assume that a night’s stay at a Marriott is ~$80.00 USD.  This means that one has to spend about $1,700 to qualify for $80.00 USD.  Herein lies the truth: the Actual Value is trivial, whereas the percived value is large.

Now, the same argument goes for the Delta Sky Miles — the valuable part is the miles, but the designation really is a label for people who fly a lot — who wants to be part of that group?

Here’s another way to think about things:

The matrix above shows 4 quadrants against the labels of Perceived Value and Actual Value.   The bottom left quadrant shows items that are low-perceived and low-actual; the bottom right quadrant shows items that are high-perceived, low-actual; the quadrant on the top left shows items that are high-actual, low-perceived; the items in top right quadrant are items that both high-perceived, high-actual; other junk mail offerings fall under this category also.

In my opinion, products such as the Marriott Rewards, Delta Sky Miles, and other products like that belong to the High-Perceived AND Low-Actual quadrant.  Other items that might belong to that quadrant might be items such as job titles, designations, and more tangible things such as cars, clothes, or other items that give us the feeling of being “better”, but are, in reality, not.   Credit Card offers often fall under the category of high-perceived, low-actual.

From a relationship perspective, some acts of kindness might have a low-perceive value but have a very high actual value.  Here’s an example: some acts of kindness might be small and have a low perceived value, but to the recipient, the actual value is actually very high.  For example, today I encouraged my wife to take a nap for several hours while I spent time with the kids.  To me, it was my way of letting her get some well-needed rest and my way of spending time with the kids.  For me, it was really no big deal (low perceived value).  But, for my wife, the recipient of the act, it was an act that had a very high actual value.  She was very thankful for the chance to sleep and rest.

This is what I believe to be true: small acts of kindness have a very high actual value for the recipient, but a low perceived value for the doer of the act.

Can you think of the important things, people, or activities in your life.  Can you cleanly place them on the matrix above?  Are there any surprises or “A-Ha’s”, where you thought something was very valuable, but turned out to be a high perceived but low actual value?  Any surprises?