Pricing is definitely a careful issue that you should study deeply. Price interferes heavily with our VALUE perception. The first thing most people ask in the first place is – what price? Mentally we create our notion of value highly based on price, if a product has not enough apparent quality or the service reveals itself low, we could think of a price that is not suitable because is not aligned with the rest of the value components and offer that we build in our minds.
Moreover, all depends on your market – each person’s perception of what value is all about is different, I can be willing to pay more than other person for the same tangible solution, or the opposite, and the fact is that there are many companies that still start on their cost & profit mentality, instead of thinking first on which price will their target market be willing to pay for.
There are plenty of other factors such as your competition, current economical condition, third party’s influence, etc .. that affect the decisions of price sensibility in your market and which you have to assess, but even though, what you really should think of is the whole value proposition and where your pricing should be aligned with.
Easily resuming, I quote Seth Godin:
“Your sales force and your customers may scream that you need to lower your price. It’s not true. You need to increase your value. If people don’t want to pay, it’s because you’re not delivering enough value for the money you’re charging. You’re not selling a commodity unless you want to.”
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