Or providing the same service but much better, and at a slightly elevated price that's justified. Took me a long time to learn that I can charge a lot and still add value.
This is indeed a hard lesson to learn. For me I used to charge less out of insecurity that I will lose the customer. But later on I grew some backbone to ask more. It depends on customers as well. Now I simply steer clear of prospects too driven by price rather than value.