Why Seriously Low Prices Can Backfire Seriously

Two case studies show how a too-low price produces an aura of mediocrity, sowing doubt & suspicion in the minds of potential clients & adopters.

Managers are far happier when they are cutting prices than when they are raising them. There are many reasons for this, of course. A sense of discomfort when your prices are higher than competitors (even when well-deserved). A focus on short-term performance measures like sales lifts and market-share gains. Overestimating how much a price cut will boost…