Businesses often make the mistake of believing that lower prices always appeal to potential customers; however, like all aspects of how you market your company, finding the right price is about considering your customers’ preferences and figuring out how to best serve them.
Consider the story of a financial magazine that was preparing to launch some years ago. The magazine tested the market by releasing two identical versions of its first issue–one priced at $3.95 and the other at $6.95. Common sense would dictate that more people would buy the $3.95 version because it cost less; however, far more issues of the $6.95 version sold.
The magazine’s target audience worked in the financial district and had more money to spend. Further, they were wary of a financial magazine that cost only $3.95. They assumed that at that price point it couldn’t be a good quality. At a higher price, the magazine was still within their budget but appeared to be a higher quality.