1. If you charge the same as everyone else, eventually someone will come along with a superior business model offering superior value for cheaper and you will be wiped out.
2. If you charge less than everyone else, unless it’s backed by a superior business model, you will just ground yourself into the dirt.
3. Charging more obviously puts you in a much better position, because the margin gives you a lot more leeway to be innovative.
But, you can only charge more if…
4. You offer something better or different.
5. And in general, it’s better to be different than better. Better is often hard to prove, and the customer is immune to such claims.
But if you find something unique (and something the customer values) you will stand out from the rest.
If you don’t stand out, you are just a commodity and vulnerable to more innovative competitors (See point 1)
6. It’s not enough to be better or different. You also have to be able to convey that difference to the customer.
Some people make the mistake of raising prices without putting in the work to demonstrate to the customer why they should pay more.
7. In many ways, the challenge isn’t setting prices, it’s getting good at demonstrating value to the customer. If you can demonstrate value, pricing will take care of itself.