Microsoft sells millions of copies of its pricey Office software despite the fact that Google Docs is free.

Why is that? It’s because people who buy the Office software have convinced themselves that Office is better, that it will provide the results that they expect, and that they can get the help they need when they need it.

Never mind that Google docs will provide all the functionality that 99% of Office users will ever need.

Your stuff is not worth what you say it is. Your stuff is worth what people are willing to pay. Your stuff is worth the value that people feel they receive from it.

That means you can drive buyers away by setting your prices too high.

But you can also drive buyers away by setting your prices too low.
Low prices will cost you more business and more profit than high prices. By undercutting your prices you are lowering the perceived value of your offer in the eyes of your customers.

Price your offer too high, and you’ll never get a second look.

But price your offer too low and you’ll turn paying customers with credit cards in hand into skeptics.

Don’t undervalue your offer.

So what is the perfect price?

It’s better to be slightly above the market – and then show the value that buyers are getting for their money.

Price your offer significantly below the going rate and you might as well throw hundred dollar bills out the window.

You’re defeating yourself in two ways.

First, you’re giving away profits that should be in your pocket.

Second, you’re creating doubt in your customers mind. Doubt that maybe there is something wrong with your offer. Doubt that you can stand behind it. Doubt that you will even deliver on your promises at all.

You walk a fine line in defining the perfect price – and it doesn’t help that the line is always moving.

To find the sweet spot you’ll have to constantly test and tweak your offer. But when you do your customers will re-pay you with their business at a fair price.

Great marketing does not convince people to buy. Great marketing provides so much of the right information that people will actually convince themselves to buy from you.