If you are tryng to sell something you don’t always have to appeal to your customer’s logic. If you can play off of emotions, you can easily make a sale. In many cases actually appealing to emotion is stronger than appealing to logic.
Each spring gardening enthusiasts spend hundreds of dollars on annuals that will only be in bloom for a few summer months. Annuals can also be cheap, but true gardeners want to buy plants that not only make their property look good, but make them feel good as well. It’s an emotional -pride type of issue.
I asked my neighbor who is a true gardener through and through why he doesn’t wait to buy his annuals on sale or at the bigger box stores (since he buys in such vast quantities) and he answered that discounted flower products are perceived to be low in quality because they are cheap to buy. And he didn’t want to plant flowers that may make him look bad in front of his fellow neighbors.
The specialty gardening store that my neighbor frequents is able to supply annuals for pennies on the dollar, but the store owner keeps his prices a bit higher than the competition. It’s not that the owner can’t make a profit charging less money, but it’s because his customers perceive his flowers to be better when they are priced higher.
The take-away is: when you are pricing your product or service you shouldn’t only base it off of your costs or what your competition is charging. Rather, you should also base pricing off of what your customers are willing to pay for your goods. You may end up noticing that if you charge more money, you’ll actually aquire more customers.