Consumers assume expensive things are better, even when they're not. A low price can make people think your product is low quality, which actually makes them enjoy it less. Marketers should price products to match what customers believe they're worth.
Chapters
If something we're looking to buy doesn't cost much or is even free, we tell ourselves it isn't worth very much. We have an implicit and often unconscious bias that equates the value or quality of something with how much it costs. For example, if we order a moderately expensive bottle of wine at the restaurant, it makes us believe the wine is going to be awesome even before we've tasted it. Spending a bit more on a car makes us believe it's going to handle better, be more luxurious, or maybe more reliable. If something costs more than its rivals, a part of us thinks, "Well, why else would someone buy it if it wasn't worth the money?" When you buy something that costs more, you tell yourself a story about how good it's going to be and how much you're going to enjoy it. So if you charge less for your product than it's worth, what story do you think the customer is going to tell themselves?