As a youth, you tend to think price is in some way related to cost.
It is not.
It's easy to be taught this in your MBA course, it's easy to think this is evil from your Marxism course, but I have found it really is the way of things. The answer to "how much is that doggy in the window?" is at best "what's he worth to ya?" and at worse, "how much you got?" How much time, care and energy went into raising the bitch and birthing the puppy have nothing to do with it. (yes I choose that metaphor to create a credible excuse to curse. son-of-bitch-shit!)
The deeper truth I've come to appreciate over the years is people don't even really want a fair deal. They want to pay as much as they possibly can afford for something, minus a "smarty" cut. My Dad always taught me to buy the second best computer setup a manufacturer offered. This is standard. We built a site for ManageCamp and went for a couple of years and one of the things I remember is a marketer talking about the overwhelming number of choices facing consumers. Hundreds of toothpastes, scores of diaper brands, a dozen sizes of the same brand of ketchup – it's crippling to be faced with so many choices.
Conversely, consumers are dubious of single plans. If there's NO choice at all to make, you feel useless as a consumer. What smart decisions did you make to get the most bang for your buck? None? You must be a crappy shopper. There's a balance that you have to shoot for, and I am a firm believer that 3 is the magic number.
Price something with three variants: Pimp-ass, Just Barely Cutting it, and the One we would have fixed it at anyway. You see this most elegantly done with Macs. Which MacBook Pro do you want? There's almost always just three choices. What happens is you WANT the pimp one, you convince yourself the Barely Cutting It one won't do, and you end up making the smart decision that the middle of the road is right for you.
What I hate, absolutely HATE, that I see a lot of our competition doing, is offer something for nothing or close to it and then screw the customer over on options. This is the car sales philosophy. Every option costs way more than it should, and since the base package just barely gets you buy, you HAVE to have the options. Sales departments love it because they can fuck with pricing constantly, pricing every new feature that tech comes up with as a "add-on".
Consumers are bewildered. The only way this works (imho) is you get the customer roped in through being such a dominator in a vertical or having a marketing approach that burries the add-ons, then as they want your solution to their problem to actually, well, work – they get screwed on add-ons. Check your cable bill now that you've got digital HD onDemand working. Look at the price of that car on the TV commerical vs. your car loan amount. We're not gonna do that.
As stated in previous posts, Concrete CMS is now free. Our hosted installs aren't because, hey we gotta eat, and we're gonna price our installs in the glorious set of three I love. I can't tell you today which features you'll get for the Pimp version vs. the cheap one, but all of them will solve the same basic problem and the deal will be fair – and most importantly, easy to understand at a glance.