Hiding your prices – Don’t do it!

Talking about money is hard, even for online business. Many times when you visit a website, it is not easy to find the prices for the offered services.

You can go through three or more different windows with trials and special offers but you cannot find how much you will finally have to pay for them.

Some weeks ago, Brent went to the WordPress.com website looking for the prices of the premium features offered by the blog platform. He spent almost 20 minutes browsing the website and he could not find any prices – they simply weren’t available.

WordPress.com spoke of the advanced features, then immediately tried to convert to their free option without mentioning pricing. (check it out http://en.wordpress.com/products/) P.S. If you want to find pricing BEFORE signing up, try a Google search – Brent could only find pricing in a WordPress.com community forum (yes really!).

Is hiding prices the right thing to do for an online business? We wanted to know what experts think about it and we talked to two marketing professionals in the United States and Canada: Jon Samsel, CEO at Heardable and a Social Media and brand consultant, and Mitch Joel, a marketing and communications visionary who is the president of Twist Image and the author of Six Pixels of Separation.

Why You Should Publish Your Prices

Jon thinks that service companies such as creative agencies, consultants and brokers should be posting the price of their goods or services on their websites. He thinks it’s a huge mistake if they don’t for three main reasons:

1. It’s not transparent. In today’s interconnected web world, you cannot shield, hide or conceal information for very long. In fact, information longs to be free. If you don’t post your pricing, it’s a good bet someone else will. Even worse, they will talk about your pricing for you in a way that you may not approve of.
   Today’s most successful companies have realized that freeing up data that was previously restrained behind firewalls can actually open up a new dialog of business possibilities. Remember the Law of Reciprocity: You get what you give.
2. It’s not authentic. Credibility starts from the source. If you withhold your pricing information or supply your site visitors with mere teaser rates in hopes they will call you and enter into a wrestling match with your slick sales staff, you may come across as a firm that is driving the conversation according to your terms instead of having an honest dialog on the consumer’s terms. Authenticity matters, especially online.
3. It’s not helpful. When a prospective customer takes the time to research your company online then discovers that a critical piece of information they are seeking, such as pricing, has been artfully withheld from them, there are not pleased. Dissatisfied site visitors are not likely to return if their basic desires have not been met by your site.
   In fact, poor experiences are more likely to be communicated than positive experiences. A positive online experience, on the other hand, is the cornerstone of building positive word of mouth.
   Online WOM is a powerful transactional force that should not be underestimated. Like the tiny ripples in a stagnant pond, this social web effect begins when a single finger is dipped into stagnant water. Waves in motion are transformed into energy. Energy is converted into action. Website traffic, inquiries, and sales revenue are the after effects of a productive online experience.

Hourly and Blended Rates

What about those companies whose prices can be different depending on the project/client? We are talking, for example, about Web Design and Online Marketing companies. Joel, who was named Canada’s Most Influential Male in Social Media in 2008, thinks that for this kind of business you can publish your hourly rates but nothing more than that.

Every project requires different amounts of strategy, design, content, technology and marketing. Web experiences are unique as are all of the moving parts required to create something that stands out unless you want to be boring and generic with a template website. You may be able to publish your hourly or blended rates, but I’m not sure that anything else beyond that makes any sense.

Providing Scenarios and Fearing Competitors

Samsel explains that there are three ‘reasons’ businesses tend to use when not providing clear pricing details to their website visitors:

1. ‘Every service is a custom situation, so we cannot be specific in our pricing’. This may be true, but you can always provide sample scenarios or case studies that provide specific pricing examples. Online mortgage lenders and loan aggregators like LendingTree do this all the time — “$200,000 loan for $1,014/Month”.
   By doing this, your site visitors can more easily estimate how much you might charge for a service similar to an individual customer’s needs. You can even protect yourself by adding legal disclosures to your sample scenarios so you don’t find yourself in an indefensible situation later on.
2. ‘Our prices are on the high side and we don’t want to frighten away prospects or give ammo to our competitors who may try to undercut our pricing’. Look, your site visitors are going to find out what your rates are sooner or later so why not spend some time thinking about how best to handle this up front.
   For example, a consulting company that normally charges $100,000 for a rich bundle of services could break out these services out into a Chinese menu of smaller items each priced individually, and then empower the customer to pick and choose what services they believe they need.
   It will make your solution appear less expensive up front and there will always be time to upsell a missing service later if it’s a necessary prerequisite for other services the customer needs.
3. ‘Our prices are on the low side and this might categorize us as being a smaller, insignificant player’. If this is your worry, why not embrace this and turn your discount pricing into a ‘low price guarantee’ in and of itself so that your firm can own a niche business category.
   Even large companies can offer a low priced alternative to their normally higher fees as a way of expanding its services into new market segments. Fidelity’s $7.95 flat commission is an example of this.

Helping Your Clients

Looking at our own website, we found we were just as guilty. In truth, we have always liked to discuss the needs with our clients first. It is more comfortable, and it helps determine whether a client would be best served by offering more basic services to keep the budget down, or more advanced services to achieve the goals of our client.

However, even though we believe we offer great value, we aren’t the cheapest solution on the market.  A pricing page seems like a great way to pre-qualify our leads, and inspire confidence through transparency, so take a look at our new online marketing, print and website design pricing page.

What do you think? Are there times when you shouldn’t or can’t publish your prices?