Marketing Mind

Why Lower Prices Often Kill Sales

Chuck McKay January 2025 10 min read

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TL;DR: Price is not just math. Price is communication. Lowering prices often creates uncertainty rather than excitement. This article explores why your pricing strategy matters more than the discount, why suspiciously low prices trigger fear instead of desire, and what successful businesses do instead of discounting.

Pricing Strategy: Why This Matters More Than You Think

Most business owners believe the answer to slow sales is simple: lower the price. Make it easier to say yes. Remove the barrier. It's logical, and it feels generous.

It's also responsible for more quiet failures than almost any other decision a business owner makes. Not dramatic failures. Silent ones. The kind where nothing happens and no one quite knows why.

Price is not just math. Price is communication.

Every buyer asks a silent question before purchasing: What does this price mean? What does it say about quality, risk, and intention? That question isn't answered logically. It's answered emotionally, and it's answered fast.

A suspiciously low price creates uncertainty. It suggests something may be wrong or missing. Instead of feeling like an opportunity, the offer begins to feel risky. And risk slows decisions.

People love bargains, but they hate buying junk. They hate regret more than they love saving money, which is the part most pricing advice overlooks. A low price doesn't automatically reduce fear. In many cases, it increases it.

No one wants to feel foolish. Would you?

That fear exists even when no one else is watching, and especially when no one is watching. Buyers imagine the moment of regret before they imagine the moment of savings. Price becomes a shortcut for avoiding embarrassment.

Three Stories, Same Lesson

Years ago, I watched three situations unfold. Different businesses. Different people. The same outcome.

Story One: The Tires

The first involved a young man and a totaled car. He had just spent four hundred dollars on new tires. A week later, the car was destroyed, but the tires survived. So he lined them up in his front yard with a handwritten sign: "New tires. Ten dollars each."

No one stopped.

He waited a couple of days and lowered the price. Five dollars each. Still nothing. Not a glance, not a question, not even a slow drive-by.

Frustrated, he did the opposite of what everyone expects. He raised the price. Fifty dollars each. The tires sold almost immediately.

Story Two: The Fuel Additive

The second situation happened in a convenience store. Two dusty cases of off-brand fuel additive had been sitting for months at a dollar sixty-seven per can. No one touched them. The owner marked them down to a quarter and placed them right by the register.

Still nothing.

Then he changed the sign instead of the product. "Cleans fuel injectors like nothing else." The price became four ninety-five. They sold out.

Story Three: The Posters

The third situation took place in a music store. Educational posters explaining chord theory were leftover inventory from the previous year. Originally priced at five ninety-five, they hadn't moved. The owner marked them down to fifty cents and put them near checkout.

Nothing happened.

So he put the price back and added a small note. "Essential reference for any recording studio." The posters sold out.

Three stories. Same result. Same reason.

The product never changed. Only the meaning did.

Every one of those low prices told the same unintended story: This is not important. This is leftover. This is something we're trying to get rid of. And buyers responded exactly the way humans always do when something feels uncertain.

They avoided it.

Pricing Strategy Analysis and Business Planning Concept. Businessperson working on pricing strategy with icons, cost tags, currency exchange, analysis charts, shopping, and price economic strategy.

The Truth About Buying Decisions

This is where pricing advice often goes wrong. It assumes buyers are rational calculators. That if the numbers make sense, the decision will follow. But buying decisions are rarely about math. They're about confidence.

A strong price feels intentional. It suggests that someone thought this through. That others have chosen it. That you're not taking a risk alone.

A weak price feels apologetic. It sounds like an excuse. And excuses make people nervous.

Think about a five-dollar tire. It doesn't feel like a bargain. It feels dangerous. Not because you hate saving money, but because you like staying alive. The price triggers a story, and that story overrides logic.

The same thing happens with food, tools, advice, and services. Cheap doesn't feel generous. It often feels unreliable. And unreliable is the opposite of comforting.

"You get what you pay for" isn't just a saying.

It's a filter people use to simplify the world. It protects them from mistakes. When you price something too low, you activate that filter in the wrong direction.

This is why discounting so often backfires. When something doesn't sell, the instinct is to lower the price. It feels responsible. It feels like action. But it often sends a message you didn't intend to send.

It says: Even we don't believe in this.

Lower prices don't always remove friction. Sometimes they create it. They introduce questions buyers didn't have before. Why is it so cheap? What am I missing? Why would anyone choose this?

Once those questions appear, momentum disappears.

What Actually Changed

Notice something else about the three stories. The price didn't rise alone. The framing changed with it. The tires became "new tires," not leftovers from a wreck. The additive became effective, not unknown. The posters became references, not remnants.

Price gave the story credibility.

This isn't about charging more for the sake of charging more. It's about alignment. About matching the price to the promise. About presenting something with enough confidence that a buyer feels comfortable saying yes.

People don't want to feel pressured. They want to feel reassured. They want to feel smart. They want to feel safe. A strong marketing strategy aligns your pricing with your positioning to build that confidence.

Final Thoughts on Pricing Strategy

After watching these patterns repeat themselves across dozens of businesses, I've come to believe this: Your price is the most visible vote of confidence you can cast for your own work. When you underprice, you're not being generous or competitive. You're asking customers to believe in something you're signaling you don't fully believe in yourself.

The uncomfortable truth:

Most pricing problems aren't actually pricing problems. They're confidence problems dressed up as affordability concerns. And lowering your price doesn't solve a confidence problem. It amplifies it. This is where a skilled marketing consultant can help you see what you're really selling.

If something isn't moving, pause before discounting. Ask different questions. Does this look important? Is it positioned with confidence? Would I feel good buying this at this price?

If the answer is no, the problem may not be demand. It may be the story your price is telling. Need help figuring out what story your business should be telling? Let's talk about it.

For Local Service Companies

If you run a local service company — HVAC, plumbing, electrical, landscaping, roofing — you've probably felt this pressure. Competitors seem to undercut you. Customers ask, "Can you match this price?" Your instinct might be to say yes. Your pricing strategy, however, should focus on differentiation, not discounting.

Don't compete on price with either one. Compete on certainty.

Your price should communicate: licensed, insured, accountable, and professional. It should say that when you leave, the job is done right and the customer can sleep at night. Charge what that peace of mind is actually worth.

When a potential customer flinches at your quote, the issue is rarely the number. It's that they don't yet understand the gap between what you do and what their brother-in-law with a YouTube video does. Your job isn't to lower the price. It's to make that gap visible.

The Smarter Pricing Strategy

Clarify your positioning: What kind of experience are you selling? Fast? Premium? Personalized?
Define your value: What specific benefits do you offer that others don't?
Highlight your expertise: What unique skills or knowledge set do you bring?
Emphasize your reliability: What guarantees or assurances do you provide?

Make certainty visible:

Show up on time
Answer your phone
Explain what you're doing and why
Give a written estimate that doesn't change unless the job changes

These aren't extras. These are the reasons your price should be higher, and you should make sure customers understand that.

And if the customer is watching it couldn't hurt to explain what you're doing. "There are two ways of handling a problem like this one. First, we could follow the text book example and connect the whatzenfrazzle to the gizmotron like they taught us in tech school. The other way has been written up in several technical publications because it's proven to last twice as long. Since the cost is the same, I'm choosing the second procedure so that you have much longer before you need my services again."

For Local Retailers

If you own a retail shop, your pricing strategy is even more visible than a service business. Every product sits there, tagged with a number. When something doesn't move, the instinct is to mark it down. But here's the risk: frequent discounts train customers to wait. They stop buying at full price because they know a sale is coming.

Your price should reflect what it costs to keep your doors open, your shelves stocked, and your knowledge available when someone walks in with a question. That's not a weakness. That's your actual product.

A customer buys a drill bit online to save two dollars. They come to you because they need it today, or because they're not sure which one they need, or because they want to support a neighbor. Price that reality honestly.

If an item isn't selling, resist the urge to slash it. Instead, move it somewhere more visible. Pair it with something complementary. Add a small sign explaining what it's for or who it's perfect for. Give it context. Give it a reason to matter.

When you do discount, do it with intention.

A sale feels exciting. A clearance bin feels desperate. Know the difference, and make sure your customers feel it too.

The Real Work

Aggressive pricing doesn't mean cheap. It means deliberate. It means you know what this is worth and you're not apologizing for it. That kind of clarity is surprisingly attractive.

This applies to more than inventory. It applies to services, expertise, and advice. Every price you set tells customers how seriously to take you.

People don't want cheap.

They want certainty.

Price is one of the strongest ways you give them permission to say yes without fear. And when that permission is clear, things move.

Need Help With Your Pricing Strategy?

Pricing isn't just a number—it's positioning, confidence, and communication. Let's talk about what your price should actually say about your business.

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