Caught a podcast snippet about pricing psychology that clicked for me

I was driving back from a job site in Akron last Thursday and heard some random entrepreneur podcast where the guy said "people don't buy on price, they buy on perceived value." He gave an example of a $79 tool vs a $199 tool where the expensive one sold more because people assumed it was higher quality. I've been undercharging for my handyman services for 2 years now because I was scared to ask for more. After that I raised my rates by 25% and lost exactly 2 clients out of 30. Has anyone else found that charging more actually brought in better customers?

2 comments

2 Comments

taylor8215d ago

30 clients is a pretty small sample size to be drawing big conclusions from. I bumped my freelance rates by 15% a few years ago and lost 3 out of 12, which stung way more than the extra cash from the ones who stayed. Could be your market in Akron is just less price sensitive than mine down here in Columbus, or maybe those 2 clients were the ones who always complained anyway. Just saying, maybe don't base your whole pricing strategy on one podcast guy's example.

gray_schmidt815d ago

Funny you mention that podcast guy, I once raised my rates by 10 bucks an hour based on a TikTok from a guy who said "clients only respect you if you charge more." Lost two clients that same week, one of them was my most reliable regular who paid on time every month. Guess that 10 bucks wasn't worth the peace of mind.