As a business growth strategist I am constantly helping service providers figure out their pricing packages and identify their margins of cost and managing it effectively. The one common item we run into is how important is pricing compared to many other factors. The common answer we find is almost on every occasion the service you offer and quality of product beats out your pricing every time.
This means if a customer is satisfied with your product they will ultimately return for more products or services, refer or recommend business and actively promote you to their network. This will allow some service provider to charge less just to tap into a big network of referrals. I recently had my web associate test this on a client who was very connected to a massive list. My web associate charged less, put a ton of effort into going above and beyond the clients needs and in return profited largely from the amount of referrals passed on by this respective client.
Most of the time this can be a risk however if your communication is effective and you do a good job servicing your clients you will win them over. The most effective and succesful service provider is one that can turn his clients into an army of promoters.
Pricing is essential but you also are going to run into customers with different budgets and capabilities. It is up to you as a business to determine if you want to turn them away.