How to determine product pricing? Just price it higher

Why pricing your product lower makes no sense and what options do you have with the pricing policy.

Pricing can be tricky. Especially when you just enter the market. It seems that if you make your offer more competitive the customer will be inclined to choose it over other available options. Offering life-time deals or annual subscription for $50 “just for the launch week” — seems plausible, right? Everyone does it, meaning it works. But let me tell you something unexpected — lower price is actually a straight path to a shitty customer experience. While a higher price can actually improve customer’s experience and perception of the product. And there’s scientific proof behind this statement.

High price improves product perception

In 2008 Dan Ariely, Professor of Psychology and behavioural economics at Duke University recruited 82 participants who agreed to receive small electric shocks before taking a painkiller and right after that. The participants were told that they were about to test the efficiency of the painkiller. One group was told that the pill went 10 cents a dose, another group was informed that the shelf price for 1 pill went as high as $2.5.