Two Points....<p>Lazy Man's Version.
1. "People Buy the Hole, Not the Drill!"-Marketing Axiom
2. delink product from price and link price to value.
3. Always compare apples to oranges when selling. the worst thing that could happen (from a marketing and pricing perspective) is your product or service becomes a commodity in your customers eyes.<p>The story goes that when Robert Kiyosaki first developed his Cash Flow 101 board game to teach kids about money, he ran some focus groups asking how much people would pay... the common response was between $20-$40, which is pretty normal for a board game.
He supposively ran into Dan Kennedy who explained to him that instead of comparing this game to other board games, he should focus on the value it creates and the financial education it delivers and charge like $200 for it. He did this and still sold hundreds of thousands of copies. (it's available on amazon for $99). Drawing the comparison of apples to apples or in this case board game to board game was holding him back in his mind, but if the value was communicated properly, the game actually saves you thousands of dollars of education in a money course, or worse, a lifetime of money mistakes. ALWAYS COMPARE APPLES TO ORANGES. you never want to draw a side by side comparison, because then price becomes relevant. If you succesfully delink product from price, and realize that price is actually by definition a numeric representation of value, you can actually charge what a product is really worth. This is also why a "Unique" selling proposition is so important, you don't want to be viewed as a commodity to your customers, it will only hurt your bottom line.<p>Smart marketers live by the axiom, "You Buy the Hole, Not The Drill!"
(Although, this concept of selling benefits, not features is only one layer, and there are deeper emotional layers if you want to peel the onion. The better you understand what drives your customers decisions, the more effectively you can communicate the value you are really providing to them. Keep in mind though that you need to tie the benefits into features, to explain how you will deliver that benefit. A good exercise for this is a two column spreadsheet where you outline all the features of the product in one column, all the benefits in another column, and start drawing lines matching them up to each other. Yes, good copywriters and marketers actually do work, they dont just suddenly get inspired :)<p>There is a great book on pricing strategies by Dan Kennedy and Jason Marrs worth reading if you want to learn how to set your prices properly.