Pricing can be a scary topic. You’d probably much rather talk about your products or services, or how you can be of assistance to your customers. You've attracted a potential client, you don't want to put them off before you've even got going!! It's necessary however to face the fact that pricing is just as important a concept to communicate as the excellent features of your product or the benefits of your service.
Price does matter - no matter how wonderful your product or service is, if it's out of their budget, there’s nothing you can do about it. The goal should be to at least weed out the people who can't afford what you're offering – and to create a starting point for the pricing conversation.
Use the right tone
For starters, stop thinking of prices as something you need to "keep under your hat" and start thinking of it as something to bring up for the benefit of the customer. Your pricing page and materials should be designed to help a prospective customer make the decision that's best for them.
Provide them with the simplest explanation of your pricing, and then think about any related questions they would have at this point. Put yourself in the customer's shoes. Don't sell, explain.
Pick the right time
In general, there are two moments when pricing is important to a prospective buyer:
- At the beginning of the negotiations, when they are trying to decide if your pricing is even in the ballpark of what they can afford.
- At the end, before making a purchasing decision, when they are weighing the cost and benefits of buying.
The first is an opportunity for potential customers to discover whether the prices will be a fit or not. It's not necessarily a bad thing if they look at your pricing page and rule themselves out; in fact, it can end up saving your company - particularly your sales team - a tremendous amount of time and resources.
The second occurs when the potential customer is heavily weighing up a purchasing decision and is figuring out their own budget. At this point they'll need more details and a way to communicate the pricing to other decision-makers or budgetary authorities in their business. You need to have a clear, easy-to-understand pricing page for the first scenario, and additional documentation that provides a more detailed breakdown of prices for later in the negotiations.
Think Steve Jobs. If you have ever seen him launch a new product you’ll know that he spends a lot of time giving you a deep insight into the product and how it is going to change your life. Then, after he has shown you all of the ways it is superior to anything else on the market he produces a price that is higher than Apple’s competitors. You feel you can handle the price because you have seen what it delivers, the basis for the price.
Should You Put Pricing on Your Website?
Often, companies choose not to include pricing on their website, and instead require potential customers to call them up for a quote. The reasoning behind this is understandable. For example, you might not want to run the risk of turning off a potential buyer before you've had the chance to demonstrate the value of your product/service. This is particularly the case for companies that sell high-end products or services and have longer sales cycles. Maybe you have a complex pricing model that requires a lot of explanation. These are both good reasons ... but in many cases, they're not quite good enough.
As a pricing expert, you need to anticipate your customer's needs and make their research go smoothly. Whether you like it or not, understanding costs is a fundamental piece of those prospects' research and the bottom line is: if you withhold critical information until they've already invested days and months, they'll feel misled – and turn away. If you don't list prices on your website currently, change that now!
There are however, a few instances when a pricing page on your website doesn't work. If your pricing really does depend on a case-by-case basis and requires an assessment, for example, a pricing page probably won't make much sense. However, consider giving your website visitors some ballpark figures or another way to get a sense of your rates before they pick up the 'phone.
Here are six best practices to keep in mind when creating a Pricing Page:
1) Don't overwhelm people
They've came to your pricing page with one main question: "What does it cost?" Make sure your page gives that information plus supporting details. Keep the pricing page uncluttered so it's not difficult to find the figures they need. If your pricing is more complex, at least consider giving viewers a clear starting point for your pricing information
2) Be very clear about the value they'll be getting
Make sure the value of your products/services is evident on your pricing pages and clearly aligned with your prices. Patrick Campbell, CEO of Price Intelligently, a price optimization company explains here the concept of a 'value metric.'
"If you're selling eggs," he explains, "then you'll charge a customer for each egg, and you can even give them a deal to purchase a dozen or more. There's a clear exchange in value for the price. Even in complex products, there should be a clear definition of what additional value each increment in price gets you. Pricing in this manner assures you're charging the customer for the actual value you're providing".
3) Help customers find the right pricing 'fit'
If you provide different pricing packages, give your prospects some hints about how to assess their own fit for each one. Highlighting your "best offer" is one thing, but it's extremely helpful also to give viewers a set of questions or scenarios that will help them determine which package is best for their particular needs.
4) Address their questions
Turn a common pricing query into a search magnet. Swimming Pool manufacturer Marcus Sheridan wrote a blog entitled "How much does a fibreglass pool cost?" This article attracted so many searchers and channelled scores of leads for his company that it lead to a leap in profits for his company.
5) Be re-assuring
In your pricing details, it never hurts to integrate proof or encouragement to assure the buyer that he or she is making the best possible decision. Find places to tie-in content that shows how purchasing your product or service will pay off:
- Include names of other companies that have bought from you.
- Show results your company has achieved, or ROI data.
- Provide hand-picked testimonials.
- Include social media or third-party site testimonials.
- Provide customer case studies.
6) Make the pricing information easy to email and print
This may seem like a minor detail, but purchasing decisions often involve more than one person, especially in a B2B setting. You can help your prospective customer by creating your pricing information in a format that's easy to share, send around for review, and print if need be. Consider a PDF in addition to your pricing page, or a customized proposal that you can send via email.
Pricing is just as much a marketing tool as it is a sales discussion. Instead of shying away from creating content on pricing or avoiding the topic altogether, you can benefit from tackling this issue head on, and putting prospective customers' needs first.
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- A critical part of pricing many manager's forget.
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- To cross-sell, or to up-sell, that is the question.
- 5 signs you're a pricing genius.
- 16 ways to handle pricing objections.
- 9 factors that affect a customer's willingness to pay.
- http://blog.hubspot.com/blog/tabid/6307/bid/33907/How-to-Talk-About-Pricing-Without-Scaring-People-Off.aspx Meghan Keaney Anderson
- Harvard Business Review on Pricing, November 2008
- Pricing for Profit:how to develop a powerful pricing strategy for your business, Peter Hill 2013
- Pricing Strategy:setting price levels, managing price discounts and establishing price structures, Tim Smith 2011
- So Why do I Care? Management, marketing and innovation insights for a changing world, Tom Coughlan 2006