In some cases, "CHARGE MORE!" is bad advice. Let me explain.
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I like this. It makes a lot of sense.
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You just described the laws of demand and supply. But there is a loophole there. The same one that allows for a marketplace with 1000€+ iPhones and 500€ OnePlus. The machines are identical in spec, but one has perceived status BECAUSE it is more expensive. My 2 cents.
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I don't think it's because it's more expensive. People do it for: - the status - doing the same thing as their peers - having access to certain apps - hero worship (Steve Jobs) Seth Godin puts it this way: "People like us do things like this."
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To further the point, you can’t charge more if your customers don’t understand that your product delivers those things. Delivering one or more of those things is great but if your customers don’t understand that, they won’t buy into the price increases.
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This is why Product Marketing is so importing. It continually casts a vision to your existing customers. If they don’t understand your vision, they won’t buy in. Lack of buy in increases the likelihood of churn when a prices go up.
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Intuitively your logic does make sense, but there are some lurking variables here you're potentially missing. The supply/demand curves we were taught in basic econ courses being two straight lines are actually not reality (kind of like learning "Christopher Columbus discovered 1/
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America" - the truth is actually more complicated). In reality, demand curves can backbend and spin around in different directions, so it's not true on the entire curve that lower price = more demand and vis versa. Presenting this (probably obvious) statement, because when you 2/
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