- B2B customers are increasingly expecting consumer-like experiences, such as immediate access to a product’s pricing clearly stated on an organization’s website
- There is a strong argument for publishing prices, as such transparency can often accelerate the sales process and increase sales productivity
- Organizations should consider six elements when determining whether or not to publish prices
An increasing number of B2B organizations are including product pricing on their website. Although this approach can have many benefits (e.g. shorter sales cycle, more productive sales reps), it may not be appropriate for every offering. If you’re thinking about making your pricing public, consider the following six elements before making your decision:
- Your organization’s growth strategy. Many companies selling software-as-a-service products — especially those with network effects — are focusing their growth strategy on users, enabling them to get started, experience value and share the offering with others more easily. This strategy, referred to as product-led growth, requires transparency around the offering price as well as a freemium or free-trial approach to remove any barriers to the user trying the offering and experiencing value. If you use a product-led growth strategy, your pricing should be public on some level.
- The novelty or complexity of your offering. If your offering is complex or you need to explain or demonstrate its value (e.g. new concept or new paradigm offering), showing pricing on the corporate website may not make sense. By making pricing public, you risk turning the conversation into one about pricing before you’ve had a chance to tell potential customers about the offering’s value. However, if the offering is in an established market and buyers generally understand its value, publishing pricing may be justified.
- Offering standardization. Some products don’t lend themselves to public pricing tiers. Highly customized products and those with high implementation costs may not be good candidates because further engagement and analysis is required to determine price. Additionally, if you’re offering add-on services, your sales reps need more flexibility to create a package that’s based on the needs of each customer. One way around the customized service component is to standardize on several service packages that fit about 80% of your prospects; price these packages and potentially show price ranges for your offerings on your website (e.g. “starting at $10,000”).
- Offering positioning. If you want to compete on price and target price shoppers, listing prices on the website is advisable. If your organization is in an established market that competes somewhat on price, not listing prices may send a signal that your prices are too high. However, if you want to send this signal and avoid engaging price shoppers, keep pricing private.
- Brand strength. If your organization’s brand is distinct and compelling with great customer trust (high Net Promoter® scores), your prices should reflect the brand’s strength — and you shouldn’t be afraid to make them public. However, newer brands need time to tell their story and prove their value before having a conversation about price. Similarly, if your organization has products that are well known in their category and have strong word of mouth — as well as strong messaging supporting price — feel confident listing those prices on your website.
- The timing of sales engagement in the buying cycle. Typically, if pricing isn’t listed on your website, anyone interested in your offering must contact your organization to speak with a sales rep. This interaction can be helpful because it gives the rep the opportunity to learn about the buyer’s needs and add the prospect to the sales force automation system. However, human engagement so early in the process may needlessly increase customer acquisition costs, and if too many budget-lacking prospects initiate sales contact, you may end up spending valuable sales time on unqualified leads.
Still having trouble deciding whether to publicize your pricing? Consider the following additional points:
- You don’t need to publish all your pricing. You may want to show pricing for only small companies (they are most sensitive to price — and by publishing price, you can qualify them quickly) and potentially medium-sized companies, and require prospects from larger companies to contact you. Because large companies have a wide variety of needs related to functionality and volume, they likely need a consultative selling process.
- Whatever approach you choose, you still must understand what your buyers are willing to pay. If you aren’t clear on what your buyers will pay, now is a good time to conduct customer interviews or surveys to gather that information. Once you have some ranges, you may even be able to test how well transparent pricing works for you.
For more tips on developing and articulating your value-based pricing strategy, download this overview of the SiriusDecisions Pricing and Packaging Blueprint.