Transparent pricing is an all around win for service professionals. This may not have been the case a decade ago, but it most certainly is true today. We so often hear seasoned professionals advising others to keep pricing secret until a customer contacts you directly. I’ve even heard of some businesses issuing warnings to customers not to share pricing information, and even full non-discloser agreements before offering prices!
I am going to dispel the old-timer myths that sharing pricing is bad practice. Transacting business has changed so dramatically. Customer habits have evolved in such unpredictable ways, I would first question what makes matured servicemen such experts in the matter? Without building too much of a straw man argument — yes there are legitimate cases for keeping pricing secret. But I reckon for most businesses, transparent pricing listed on your website is advantageous. Let’s at least place some doubt in other service persons offering you advice to hide your prices, because it is a bit ridiculous when you really think about it.
Most servicemen who advise not listing pricing on your website have something at stake. When you place your website vs theirs, it’s to their benefit to not list your prices. It’s straight up biased advice that basically says “Please don’t compete with me!” Not to mention that it could be a full-on competitive advantage in your favor if your pricing is better than theirs. But really though, even if you had a friendly, trustworthy serviceman advising you, why you would take their advice?
Your business is unique to you and your business. What works for others is no guarantee that it will translate well to your situation. Similarly, what worked for you in the past may not work for you in the future as your business begins to mature. In truth, you should probably experiment a little bit to determine which method works best. Do your leads and sales improve by hiding prices or showing prices on your website? Answering that is infinitely more valuable than anyone’s advice.
However, in my fantastic (haha) opinion…
The world not only moves more quickly today, but also more efficiently. Syncing conversations between two people is a great example. For younger generations (i.e., future generations, trends) phone calls are annoying, while text messages and email are pleasant. This probably isn’t by accident. Syncing two person’s schedules is increasingly difficult.
We live in an “on-demand” world with “on-demand” service providers. There’s nothing on-demand about being a customer and having to pick up the phone, hoping to get someone on the business end to pick up, and asking for pricing the old fashioned way. In fact, if you’re a small business, you may not be able to afford to have a 24/7 call center. You probably can’t guarantee a staff member will pick up the phone if a customer calls. Are you comfortable betting your entire sales strategy on playing phone tag with customers? As great as your product or service may be, that’s just dumb.
After all, if your weakest link from marketing to customer acquisition is a phone call to go over pricing, you’re kind of diminishing the value everywhere else in your business. While I’m specifically talking about listing prices on your website, the point is essential for all “research” information.
You should probably ask yourself what information customers are calling you for, prior to making the purchasing decision. If customers are calling you to “do their research and ask questions” you are seriously underestimating the capability of buyers to research on their own. Your website is a marketing tool, sure. But your website can also be a sales tool. Start treating your site as a sales tool and start addressing customer research questions directly online. Prices. How it works. Get into the nitty gritty so they only have to bother you with their credit card. This is convenience.
Anybody can put up a vague website. It’s a lot more differentiating on your part to list prices online and be fully transparent with other sales information. I don’t want to suggest it is cowardly to hold pricing back until customers contact you, but being transparent certainly says something. By listing your prices loud and proud, you’re re-affirming the value proposition. You are sending a direct message that you are (a) confident of your value and (b) honest in your dealings. There are no games being played, and your brand reflects or demands those prices. That is fantastic.
There is a significant advantage though. It should be obvious. Customers shop at weird hours, late at night and early morning. There are communication errors when talking over the phone. You get your customers psychologically invested in your offering by providing online research. Leads can be qualified immediately, customers whom are ready to buy or nearly so. You are saving everyone the trouble of talking to one another. And that is, really a big deal economically speaking.
If you think about any other process as an analogy, sales should be no different. Take for example an assembly line. If you can reduce the costs of the end product by automating certain tasks and reducing labor needs, you’re going to either make higher profits or be able to lower prices. No reasonable person running an assembly line would say “Yeah, actually let’s manually do this part of the assembly process so it’s not only less efficient… but more costly and more annoying.”
But that’s exactly what any business hiding prices is doing. By not listing prices on your website, or fully answering my questions online, I’m thinking (as a customer) that there’s quite a bit of wasted margin in the pricing. The business that doesn’t list pricing or provide enough information on their website, simply isn’t as efficient or productive as the business that transparently displays pricing and other research information online. The customer will one way or another realize they’re paying for a customer service or sales person to sit and answer calls. Now my money isn’t going towards product and service, but instead to overhead. That’s not an attractive value proposition.
Now, perhaps you provide a higher-end service that justifies such overhead. It’s an experience. It’s elegant. Personable. You tell your customers “We get to know you.” Fine.
But it’s still really annoying requiring me to sync up my schedule to call you for basic info. Actually though, if your business is dealing with higher-tier clients, we can skip right back to the issue of stop wasting my time. You simply can justify hiding pricing this way, because devil’s advocate dictates that important rich people value their time (even more so than money) and they don’t want to waste it calling or drafting up emails with really simple questions you could have addressed on your business’ website, e.g., pricing, payment, how the service works.
At the end of the day, it just seems like a bad deal for customers when a business doesn’t include their pricing online. And it is a bad deal (for customers). It gives the company leverage in any and all forthcoming deals. Leverage to change pricing, issue arbitrary terms or charges, and just be a plain jerk. It’s decidedly unfair for the customer to not offer the information. You know. I know. And every business who keeps pricing offline knows — it sucks for customers. Period.
So I would encourage you to rethink the question. Should you list pricing on your website? Let’s instead ask. Should you provide a time-consuming, inconvenient experience for customers?
The answer is no, and there’s not much room to argue otherwise. However, you should test which method works best for the business goals. Just realize in todays age, if your company decides to keep prices offline, your company is blatantly and purposefully inconvenient. If a website does not have pricing automatically accessible, without the manual intervention of a live person, you will at some level leave a bad taste with prospective customers.
Summarizing the advantages of transparency and listing prices on your website:
- Convenience. Customer can research on their preferred schedule.
- Efficiency. Businesses save on labor; customer service and sales costs.
- Speed. Buyers make decisions faster, psychologically invest themselves more.
- Competition. Who wins the sale? Request for proposal -vs- online pricing.
- Branding. Pricing can easily become a brand-able trait of your company.
- Honesty. You send a message that there are no tricks or games being played.
- Confidence. You are standing behind your value, by proudly showing prices.
- Leads. All leads will be immediately qualified. They know the costs!
- Planning. It’s very hard to plan (as a customer) without all the information.
- Discounts. Pricing allows you to advertise discounts and special offers.