Pricing can be tricky.

Aim too low, and people wonder what’s wrong with your product (or think your service is second rate). Price too high, and you might have few or no takers.

I’ll pay a premium for value. Great customer service, beautiful design, and reducing carbon emissions are all value-adds worth paying for.

A gallon of milk is not a premium product. So charging a 33-percent premium ($3.99 in this store versus $2.99 here–and even less at Costco) is just asking me to shop elsewhere.

Why would any business want to do this?

Photo by Muffet (Flickr).

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Am I missing something? I really don’t get all the handwringing among insurers and the pharmaceutical industry about a public health plan component to reform. One of the latest naysayers is Eli Lilly‘s CEO, John Lechleiter, who said that a public plan is “a slippery slope towards the days when all Americans would get their health insurance through a government-run plan.”

As a business owner, I face competition every day. And almost all of it is from companies that are far bigger players in the marketing communications field. Heck, unless you’re also a solopreneur, everyone is bigger than I am.

I realize that insurers fear that Americans will drop their private insurance and flock to a government plan. That’s likely true. But companies typically lose their customers because they aren’t valuing them or providing value to them. This happens every day. And yet, while cost alone may determine some purchasing decisions, examples abound where we will pay a premium to support a brand we love. Nike makes money selling high-end running shoes; Apple‘s enthusiasts pay top dollars for a mobile phone. In the insurance arena, I’ve accepted higher auto premiums in exchange for terrific service.

My advice to the insurance industry: Stop worrying about possible competition and look at what you can do to deliver what your customers want.

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©2012 Independent Thinking. All Rights Reserved.