Charging too much can obviously be a problem.
But charging too little can also damage a business.
People often assume:
“If I make it cheaper, more people will buy.”
Sometimes they will.
But lower price changes more than affordability.
It also changes:
- how people perceive the product;
- who responds to the offer;
- how seriously customers take it;
- how much money you have to serve them;
- and how many customers you need.
Cheap Can Signal Low Quality
Years ago, I was walking past suit shops in Vietnam when a salesperson tried to get me inside by saying:
“Everything is very cheap!”
My immediate reaction was basically:
“I don’t want very cheap. That sounds bad.”
She intended cheap to mean a good deal.
I heard cheap and thought:
low quality.
That association exists in many markets.
If you see:
- a €20 suit;
- a €50 lawyer;
- a €10 business consultant;
- or a suspiciously cheap contractor,
you may wonder what is wrong.
Price itself can become part of the information customers use to judge quality.
That does not mean expensive automatically means good.
It means price affects expectations.
Low Prices Can Attract the Wrong Comparison
When your offer is extremely cheap, you often enter a market where people primarily compare:
Who is cheapest?
That can be a miserable competition.
You may spend large amounts of time speaking to people who:
- negotiate every small amount;
- compare you with the absolute cheapest alternative;
- need extensive reassurance before buying;
- have little commitment after buying;
- and leave as soon as somebody offers something cheaper.
The problem is not that price-sensitive customers are bad people.
The problem is that they may be a bad fit for a business whose advantage is quality, expertise, speed, or results rather than low cost.
If you want to compete on value, do not accidentally position yourself as a commodity.
Higher Prices Can Filter the Market
Price is also a filter.
Imagine selling a service for €50.
You may get hundreds of curious people, many of whom are only mildly interested.
At €5,000, most of those people disappear before you ever speak to them.
That can be useful.
The remaining conversations are more likely to involve people who:
- have a meaningful problem;
- have the ability to solve it;
- are seriously considering action;
- and understand that the result may be valuable.
A higher price can therefore reduce wasted sales conversations.
You need fewer customers, and you can often spend more time serving each one well.
Cheap Customers Are Not Necessarily Easier Customers
One of the surprising things about business is that reducing the price does not necessarily reduce expectations.
Sometimes it does the opposite.
When I was charging very little, selling often felt harder.
There were more objections.
More negotiation.
More comparison.
More effort required for relatively little revenue.
By contrast, a customer paying significantly more may have chosen you because they specifically value the outcome you provide.
They may care less about squeezing every possible euro out of the transaction and more about getting the problem solved properly.
Again, this is not universal.
But do not automatically assume:
Lower price = easier sale = easier customer.
It often does not work that way.
Low Prices Can Make Good Service Impossible
Suppose you charge €100 for something.
After:
- acquiring the customer;
- payment fees;
- support;
- administration;
- delivery;
- refunds;
- software;
- and your own time,
you may have almost nothing left.
Now every additional customer makes you busier without making the business much healthier.
That eventually affects the customer too.
You have less money to:
- improve the product;
- answer questions;
- hire help;
- fix mistakes;
- experiment;
- create better materials;
- or stay in business.
A price that cannot support good delivery is not necessarily generous.
It may simply be unsustainable.
There Is One Important Exception
A low-priced product can make perfect sense when it has a deliberate role in a larger customer journey.
For example:
Free content
→ €30 guide
→ €200 assessment
→ €2,000 group program
→ €5,000 private service
The €30 product does not need to produce all the profit.
It may:
- introduce people to your work;
- prove that they are willing to spend money;
- create trust;
- solve a small problem;
- and naturally reveal a larger one.
That is very different from accidentally pricing your main service at €30 because you are afraid nobody will pay more.
Low price can be a strategy.
It should not automatically be your default.
Do Not Ask Only “How Cheap Can I Make This?”
Ask:
What price makes sense for the value created, the customer I want, and the business required to deliver it properly?
Sometimes that answer will be inexpensive.
Sometimes it will be surprisingly high.
Do not lower the price simply because a higher number makes you uncomfortable.
A price is not only what the customer pays.
It also determines who enters your business, what they expect, how you can serve them, and whether the business can survive.