The Price Point Paradox
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We’ve all seen it. Those super high prices that make no logical sense whatsoever. When we pass by them we laugh. No one would ever pay that much for THAT thing…would they? Its a combination of humor and curiosity. 98% of you believes that whoever is selling the product in question is crazy, but that other 2% urks you to find out the truth.
Why? Why is it priced that high? It doesn’t make sense.
Well my friends, I’ve got some news for you. Sometimes on this bizarre planet we call Earth, crazy prices do sell product. Without diving too deep into psychology here, let’s just say that the same curiosity that propels you to wonder about what piece of information you;re missing as to why the price is so high, is the same wonder that compels them to buy.
Let’s start with a story
Outside of Web Vitals, I run a software business for game developers. I started the business when I was 15, and my first piece of software sold for 5$. I realized that there was no profit to be made at that measly amount, so I raised the price to 10$. I was terrified that this price hike would kill my sales and I would go out of business. Who cares if I lived with my parents and had no bills, 5$ could buy me lots of cool stuff.
To my surprise the 200% increase in price had no negative effect whatsoever on sales. In fact, it sped up sales a bit. I went from selling about 10 copies a month, to selling about 15 copies a month. I let it sit at 10$ for about 2 years, but I began to really get frustrated with all of the time I was spending on support and upgrades for a price so incredibly low.
That was when I made the executive decision to raise the price 300% more. I raised the piece from 10$ to $29.99, and to my amazement, orders started pouring in. This was the same program I had originally sold for 5$, and yet people felt much more comfortable paying much more for it.
In addition to my new found pile of money, I also discovered something else. These new found customers who payed MORE for my product had LESS to complain about. I was proud of my software, and it worked very well, but some of the things these guys would complain about were ridiculous. I had one guy complain about the shade of red in my logo. 
But this new customer base would not only pay more willfully for the same product, but it was a much better fit to the business.
So what is the Price Point Paradox?
The price Point Paradox is a term I created to describe this peculiar behavior. This paradox states that even though humans tend to always want the cheapest price possible for any given good or service, an unusually higher price in the midst of controlled competition can propel them to buy it anyway.
Sometimes the higher price sells better. Its as simple as that.
Some of you have fantastic products and services, but you are competing on price with all of those in your industry. Sometimes, if you separate yourself and charge the higher price, you can rise above the competition. Sometimes if you change the marketing, packaging or branding of your product or service, the value can shoot up.
Its not manipulative or sneaky, its a value proposition. You aren’t like the other guys, and you have to differentiate yourself in some way, or you’ll get lost in the crowd.
The next time you’re pricing a product, try different prices, don’t just pick one and stick with it. There are prices that sell better, higher or lower, so don’t get lost in your own ego. There is a perfect price and target market out there for every product, you just have to find it. Those that do are successful. Those that dont are stuck thinking they dont have a very good product, and its a major confidence killer.
So what about you? Have you ever bought or sold at the higher price just because?
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No, ive never done it "just because," but I have done it because it made my purchase feel like it was worth more, in some weird twisted way... This piece makes a lot of sense to me, especially when I get to feeling like raising price points may be a bad idea...
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