As much as we say that we’ll make choices based on quality and other considerations, price is always a factor. When you see a difference between prices for the same product or service, you want to know why. It’s still possible that you’ll go with the higher price, but if there’s no clear distinguishing characteristic, why would you ever go with the more expensive option?
But what if there’s no price at all?
When I’m selling content marketing services online, I make a point to list a clear set of price points — even though with services, the actual price can wind up taking some negotiating. I do that because I also do a lot of shopping online. When I’m considering making a purchase online, I use price as a filter. It’s due to the reality that, so often, there’s no price listed.
Ecommerce sites promising to ship you particular products will list prices so you can make an immediate purchase, but if you’re looking for a service, wanting to make a bulk order or otherwise interested in ordering off the menu, there aren’t any prices listed.
For preliminary research, this is a problem. I recently was considering switching my systems over to a particular type of web app, which would have provided me with an entirely different workflow. I was pretty excited about the idea and did a lot of investigation, despite the lack of prices on the websites of every business in the space. But when I started actually getting price quotes, I got a range from free to $3,000 a year. We’re talking about enterprise software here, so I wasn’t surprised that there were some big numbers involved, but I’m still operating a small enough business that a difference of $3,000 is not something I would brush off as minor.
If I’d known to expect that dramatic a difference, I’d have conducted my preliminary research differently. It’s not a question of ruling out particular options at that point, but rather an effort to understand the differences between my options within the context of price.
But They Want to Sell Me Before I See the Price Tag
The general reason that most companies are willing to leave prices off their websites and other marketing materials is because they don’t expect their clients to understand what those numbers mean.
It’s a fair concern — one that freelancers in particular share. If a prospective client sees that a freelancer charges $100 per hour (we’re sticking to easy-to-work-with numbers today), he’s going to have no idea how much a project will actually cost. Many prospects will assume the worse, along the lines that a project may take 100 hours or perhaps even forever, because the only information they have to go on is that it will take them forever to complete such a project. But the project may actually be something that an experienced freelancer can complete in just 10 hours. We’re not that great at estimating costs when we don’t know the variables involved.
But that’s not quite the issue larger companies offering software as a service or other products are facing. They’re looking at factors like bulk discounts, customizations and upsells. There’s a big difference between the bare bones package one of these companies might offer and the full-featured version — and the options in between make for a fairly complicated price list. That doesn’t mean, however, that they can’t put a starting point for their prices on their sites. Many freelancers have taken to offering a ground level price for their services to help prospective clients make a decision after all.
Rather, there’s also a sales element in play. In this situation, a seller often wants to convince a buyer that she can’t live without the product in question before the seller reveals the price tag. It’s a reasonable goal: if you can make the cost incidental by demoing something so valuable that a buyer can’t afford not to have it, pricing doesn’t matter.
If You Have to Ask, You Can’t Afford It
Withholding pricing information is not the best option, though, and not just because this approach inconveniences me personally. It may be creating a situation where prospective buyers assume that the price is out of their range right off the bat. We’ve all been told that if we have to ask about prices, they’ll be too high for us — despite many products and services costing far less than we might expect. We’ve learned our lessons well: in the small business niche, there are plenty of business owners who limp along without certain tools in place because they feel that they can’t afford them. Something as simple as automating payroll can feel out of reach to a business owner, especially since all of the websites that show up in a search for a payroll services provider insist that you put in your contact information and wait around for a phone call to discuss an estimate.
The actual service may be fairly inexpensive — outsourcing payroll for a small business costs about $50 per month in most cases — but we make a lot of assumptions long before we get around to entering our phone numbers into some website.
That, by the way, is another pet peeve of mine. My time seems to have so little value to a company that wants to demo its product or have a phone consultation before giving me an estimate. I like email and other asynchronous communication because I can deal with it at my own convenience. Sitting through three phone calls just to get three price quotes so that I can make an informed decision for my business is not going to endear any of the options to me. It’s a useful sales tactic: for most people, it’s harder to turn someone down in person or over the phone than through emails. But just because it works doesn’t mean that it’s the best option available.
More Effective Sales Connections Require Social Proof
When choosing vendors for my business, I waffle. I want to make sure that I’m making the best decision and I tend to go back and forth for as long as I possibly can wait to make a commitment.
I’ll rule out as many options as I can, including those that seem out of my price range early on. I spend a lot of time going over what I would get for my money, but if the pricing doesn’t make sense, seems high or is just too hard to get information about, I’ll mark that option off of my list. But then I get down to two or three choices and I start going back and forth. I’ll do demos, sign up for trial accounts and generally poke at whatever set of tools I’m considering. What almost always winds up making my decision up for me is other people’s experiences. I want to know what works for companies similar to my own. If I keep seeing mentions on someone else’s blog or hear a recommendation at a networking event, that makes one option or another look better to me. I’m not the only one, either. It’s human nature to want to see social proof.
That makes generating social proof and publicizing it far more effective a sales tactic for most companies than doing odd things with their pricing pages or trying to get people on the phone. For late-stage shoppers who have narrowed down their choices, there’s nothing better than a really good recommendation from someone they actually know or, more realistically, a blogger they really respect.
Of course, it’s only possible for that sort of approach if there’s a more transparent approach to marketing in the first place: that can include posting at least a vague idea of where prices for a particular product or service start, but it can also mean putting more robust information about the features of the product in question or the results it can provide out in the wild. Think case studies, in-depth reviews and other really great content.
I, of course, have biases when it comes to this sort of marketing. But marketing has been trending more towards transparency and social proof for a while now. There’s no other option than transparency when I can go on Twitter and ask for the price of a given product and a dozen users will give it to me
Image by Flickr user Digger/ATL.