I don't think it is about intelligence, or the lack of it, but simply a matter of not knowing any better.
How many times do we see people coming on here asking if a Puzzi 100 or a Craftex Grace is a good enough machine to start off with? Are these people thick, or do they simply know no better, I would suggest the latter. The same applies where pricing is concerned. It is easy, even for intelligent people to look at this business and come to the conclusion that in order to be competitive you have to beat the next guy on price. Expose that same person to the idea that if you want to compete with others then compete with them on quality and they may well look at this business differently. What the low price people don't realise is that the lower end of the market is I would argue the smaller by customer volume, but yet highly populated by competing cc'ers than the market that sits above it where the more discerning customers are, people who have often fallen for the low price, low quality option in the past and have learned their lesson and now look for and are willing to pay for a professional job this time around. The other problem with the low price market is that because people buy your service on price they are less likely to be loyal to you next time around and once again give the job to the lowest bidder, so you can't build a core of customers who through the quality of what you do have come to see you as 'their' carpet cleaner and that can be fatal for a business, but yet be the 'holy grail' for a successful professional carpet cleaner with the right 'attitude.'
All of the most successful carpet cleaners I know have a core of customers that wouldn't dream of using anyone else and that is something those guy's made happen by focusing on great customer service and most importantly of all, fantastic quality at a price their customers can live with. Carpet cleaning is not about price, it is about quality - quality - quality and you don't have to be a rocket scientist to work that one out.
Simon