More psychology of pricing

This weekend I read a fascinating article on Dale Chihuly, the famous Northwest glass artist, called Inside the Glass Empire. The article discussed how Chihuly, always colorful and controversial, has built his profitable business. The following section caught my eye:

…Elliott, who worked for Chihuly in the 1970s and ‘80s, remembers their conversation when an Arizona craft gallery couldn’t sell a batch of glass cylinders. Chihuly looked at the prices and came up with a startling solution: “I bet if I add a zero to that they will get some respect.”
The higher prices helped push his work into the realm of fine art rather than craft—paying off brilliantly for Chihuly and eventually for others, too…. (Seattle Times, August 6, 2006)

Again, this goes back to price perception. Right or wrong, people value what they pay for. When you increase the price of your products or services, people believe they are worth more. We know this is not always true, but the PERCEPTION is that it must be a great service if it is expensive. So what does your price say about your service? Could you command more respect if you increased your price?

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