Again, I’m going to defer to excerpts from Seth Godin from some book I found probably fifteen years ago – from which I scribbled some notes – and whose title I scant remember. Sorry Seth, but I did give you credit:
“Either the price is cheaper or it’s not.
“Over time though, in a competitive market, the quest for bottom price leads to brutality. The brutality of harming your suppliers, the brutality of compromising your morals and your mission. Someone else is always willing to go a penny lower than you are and, to compete, your choices get ever more limited.
“The problem with the race to the bottom is that you might win. Even worse, you might come in second.
“To cut the price on that ebook or ten dollars on that plane ticket you have to slash the way things are edited, or people are trained or safety is ensured.
“You have to scrimp on culture, on how people are treated You have to be willing to be less caring or more draconian than the other guy.
“Every great brand (even those with low prices) is known for something other than how cheap they are.
“In the long run, to be the cheapest is a refuge for people who don’t have the flair to design something worth paying for. Who don’t have the guts to point to their product or their service and say, “This isn’t the cheapest, but it’s worth it.”
“Why You Usually See Three-Tiered Service Pricing”