[tptacek]

Because price is a filter; the more restrictive the filter, the more valuable your product actually is to your customer, and therefore the less likely they are to squander the relationship.

[cperciva]

Also, people who are able to pay more are generally more likely to be mature and good communicators.

This is also a well known phenomenon in the web hosting industry.

[ErrantX]

So true - the other thing is it attracts more serious customers too.

My on-the-side consultancy initially was charging silly low rates to get some custom. It kinda worked but we ended up with demanding customers looking for a good deal at a low rate.

Now we feel established enough to raise rates the customers are a LOT better and the sites are rolling out a lot more smoothly all round!