The Pratfall Effect in Pricing
Admitting your product's limitations can increase willingness to pay by enhancing credibility and trust.
Explanation
The pratfall effect shows that acknowledging weaknesses makes you more believable and likeable. In pricing, this means being transparent about what your product doesn't do can actually increase perceived value of what it does well. Customers trust companies that admit limitations more than those claiming perfection, making them willing to pay premium prices for focused excellence.
Real-World Example
Basecamp admits they don't do timesheets, Gantt charts, or reports—and charges premium for being 'the simple project management tool.' Tesla openly discusses range limitations while selling more EVs than anyone. Warby Parker acknowledges they're not for everyone, just people who want stylish, affordable glasses online.
How to Apply
Identify 2-3 things your product explicitly doesn't do and lead with them. Frame limitations as choices, not shortcomings ('We chose simplicity over complexity'). Use limitations to qualify prospects and reduce support costs. Position trade-offs as benefits for your target market.