This post was sparked off the back of a tweet I was shown by my good friend Doug Ayling, when we were debating, over a pint of course, why some software companies don’t show their pricing.
The tweet by @coffeebite said…
… and it was accompanied by the following picture from SpaceX's website:
Nitesh is calling the bluff of software companies, with a bit of fun. He’s saying, if a provider of space rockets can put a price tag on their website, in this case $61.2 million for the Falcon 9 and $90 million for the Falcon Heavy, what justification does a software company have, where they have a good grasp of their own product, and a good grasp of what benefit it can provide their customers, for opting for the ‘Contact Us for Pricing’ approach?
“Yes, you should have pricing on your website. We are living in an age of increasing transparency. Hiding pricing will alienate an increasing number of potential customers”.
Customers like to have as much information as possible at their fingertips before even contacting the supplier to make an enquiry or purchase. With 57% of the decision process typically being completed before this initial contact, if you do publish your prices online, and the customer still calls you up, you know they are serious and you have already gained those extra few ticks towards a yes.
You may have a complicated product with an accompanying high price tag and believe that publishing your prices online will put people off. However, if on your website you have clearly articulated the value your product provides in order to justify that price tag then that argument no longer holds water.
Yes, I understand that if you have a complex product this will be tough to do, but even offering entry level prices is a good starting point as it will give your customers at the very least a price benchmark they can work with.
With your pricing model published, you can then work hard to ensure both you and your customers reap the rewards. What I mean by this is being flexible enough to offer the most value to a wide range of different customers. Typically in the pricing space, if you improve your pricing by just 1%, you’ll improve margins by 11%. But an 11% improvement for a £10million turnover company is going to be very different to a £1billion plus company.
What’s your thoughts on being open and transparent with your pricing? Join the conversation on @blackcurveHQ.