How to understand the sentece below?

"This is about perception. The problem is if you discount, the discounted price becomes the new full price. All you have done is erode your profit margin." One of Smith's clients, a technical consultant complained that his less experienced opposition was winning all the pitches. Smith concluded his $90/hour rate compared to the opposition's $130 was the problem. "I said, 'Put your prices up. If you are $90, people's perception is that the value of what you are offering is less than the other guy. They think they are getting second-rate advice." The client took the advice and his business quadrupled.