This is one of those pieces of human nature that I don’t really like, but I need to accept that it’s true. If you pay less for something, you value it less, even if the true value is much higher than what you paid for it.
This applies to buying cars, purses, electronics, or almost anything you can think of, and it can even apply to digital goods and services.
10 years ago, when GreenMellen was just starting to find its footing, Ali and I had a great opportunity with a potential client that needed a new website. They needed a lot, so we spent a good deal of time putting together a proposal and it totaled nearly $13,000. That’s a big number today, but that was an unbelievably large number to us in 2013.
We lost the bid for a surprising reason — our price was too low. They felt that for $13,000 we’d be falling short of what they needed, and they were looking to spend closer to $20,000.
In the book “Why We Hate Cheap Things“, they simply say:
A reduction in our esteem for an experience follows a reduction in the cost of obtaining it.
We understood that website project, and I’m confident they would have been pleased with our outcome. If we had simply raised the price by $7,000, we might have won the bid and been able to find out for sure.
I don’t advocate that you raise your prices arbitrarily, as we certainly don’t, but the perceived value of something is based largely on the cost and that’s always something to be aware of.
