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Should You Publish Your Prices on Your Website?

Posted by John McTigue on Tue, Oct 18, 2011 @ 07:18 AM
 

Unless you're a B2C company with very specific prices for your products or services, you have undoubtedly struggled with the question of making your prices public on your website. For B2B's there are plenty of good reasons to do so and also some pretty good reasons not to. Let's review these pros and cons to help you make an informed decision.

are you publishing your prices on your website

Publish Your Prices

  1. Today's Consumer Expects Pricing - look at your own buying habits for anything these days. If there isn't a prominent price tag on anything (without fine print), chances are you're moving on. Consumers of any product or service want two things 1) complete transparency and 2) recommendations from trusted sources. If you fail to disclose or make it hard to find this information, you do so at your own peril.
  2. You Gain Nothing By Hiding Your Prices - so what if your competitors can "steal" your pricing and set theirs lower to steal your customers? Price is just one factor in an overall "buy" decision. More important are value, quality, service, reputation and relationship. Concentrate on those and you will gain market share.
  3. Marketing is All About Solving Problems - your job as a marketer is to establish both brand reputation and brand awareness. If your stuff solves a specific consumer problem at a reasonable cost, you win. You have to convince your visitors that you do both - solve their problem and do so at a fair price. Why would you hide the second part of that equation?

Hide Your Prices

  1. Sale Price is Complex and Customized - This happens all the time, especially with the sale of complex systems or tailored services. In this case a fixed price can actually become a detriment, requiring you to back-track on price when customers require a special solution. Consider posting typical ranges of pricing and make it clear what factors contribute to the final cost.
  2. Your Price Appears to Drive Potential Customers Away - at least this is what you perceive to be the reason behind lagging sales. You need to support your pricing model with a solid value statement. What do your customers get in return for your fees and how do they benefit compared to competitor offerings? Don't just publish this information, make it part of your sales pitch. Address your customers' objections before they even ask you about them. Otherwise, you may be addressing them after the sale has gone to a competitor.
  3. You're Not Sure What to Charge - this one can be a killer. If your pricing is constantly fluctuating or is not carefully thought out, you may alienate potential customers. They wonder if the value of your products or services is also fluctuating. Focus on value. What does it cost you to provide your product or services? Now mark your price up to receive a fair margin that supports your overall business plan. In private consultations with potential customers, why not tell them exactly what your price is based upon? Remember, transparency is a good thing these days.

Our Experience

We have gone back and forth on the visibility of our pricing over the years. For the reasons stated above, we have decided to publish them for our two main services, inbound marketing services and HubSpot design. Our view is that transparency will help us win in competitive situations and help to pre-qualify our customers before we commit time and resources to sales consultations. We feel that the ability to improve customer conversion rates outweighs the sheer number of opportunities. We recognize that open pricing may help the competition to some degree, but we're not obsessing about that. Our focus is on problem solving, deliverability and customer success. Those factors will drive both revenue generation and profitability.

In the spirit of transparency, here is a schedule of services, deliverables and pricing ranges we put together. There is no form to fill out. Click here to download.

Photo Credit: likeablerodent

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Comments

John, 
 
This is obviously something I've thought a lot about and tested through the years. You did a great job of succinctly outlining the pros and cons.  
 
I think it's the right move for agencies like yours and ours. Particularly, as you highlighted, to pre-qualify prospects and filter out those who don't have the necessary resources to effectively engage an agency. 
 
Nice post! 
 
Paul
Posted @ Tuesday, October 18, 2011 7:44 AM by Paul Roetzer
The problem with most marketing agencies is that they're making up their service offerings, how to deliver them and what they should charge for them... as they go. They usually have NO service packaging or pricing strategy.  
 
The fact that agencies like you guys and PR 20/20 have it published prominently on your sites shows that you have your act together. You're not figuring out your services or how to deliver them efficiently - on each new client's dime.  
 
If I were hiring an agency and they didn't a) share it openly or b) have an obvious process for pricing out their services based on my needs, I wouldn't do business with them.
Posted @ Tuesday, October 18, 2011 7:44 AM by Peter Caputa
@Paul - thanks for your comments. We were inspired by your firm (PR2020) to take it to this next level of transparency and accountability. Now, as an added twist to the transparency debate, here's a link to Paul's firm's pricing page - http://www.pr2020.com/section/plans-pricing. Yes, we're publishing a link to our (friendly) competitor's pricing page so that potential customers of both our firms have a better handle on what inbound marketing costs. 
 
@Pete - thanks for your comments too. Now, if you follow our blog, you know that HubSpot isn't exactly a competitor. In fact they are both Partner and muse for our inbound marketing strategy and content. But do you know what their software packages cost? Now you do - http://www.hubspot.com/pricing.
Posted @ Tuesday, October 18, 2011 7:54 AM by John McTigue
Haha. Thanks, John. As you pointed out, price is just one factor in the partnership decision. My belief is that the more transparent you are, the more motivated you become to continually evolve and advance to stay ahead of the market.
Posted @ Tuesday, October 18, 2011 8:03 AM by Paul Roetzer
Good article with nice arguments on both sides of this issue. As a freelance writer I've gone back and forth on this idea, ultimately deciding against publishing my pricing. It's not that I don't have a solid understanding of my value, it's just that I often work with different types of clients and craft estimates accordingly.  
 
It may sound unfair to some, but I don't charge a non-profit or small business the same as I might charge a national or international corporation. 
 
Pricing also depends on how long a project might take, or whether it's a topic I'm well versed in or have a passion for. There are just too many variables to set firm prices for all. At least in my case.
Posted @ Tuesday, October 18, 2011 1:11 PM by Chris Vanasdalan
@Chris - sounds challenging indeed. Maybe a schedule or calculator of some sort based on words or hours? Maybe a range of prices for certain types of deliverables? You could always post your high-range prices then put in a special "ask me about special rates for NFP's and SMB's" line to cover that element.
Posted @ Tuesday, October 18, 2011 3:02 PM by John McTigue
I read this article on the way back from Montana and needed to let it settle. I thought about offering a counter to each of the 6 points outlined above, but decided that to do so would detract from the conversation. Kuno's Inbound Marketing Budget Calculator is well thought out. It shows that Kuno knows who their ideal prospect is and eliminates prospects that want a $1K/month shoestring solution. It's complex enough so that a potentially qualified prospect will look for advice as to which package they should buy, but more importantly, Kuno delivers a HUGE amount of REMARKABLE content that draws new eyes and brains to their site every day and when one of those brains raises their hand to buy one of their packages, Kuno's salespeople have been trained to ask, "Why that one?" 
 
I will suggest one caution. Don't base your decision whether to publish or not on the way you buy because not everybody buys the way you do. Ask your customers.
Posted @ Thursday, October 20, 2011 6:24 AM by Rick Roberge
@Rick - thanks for your comments. No one would know better than you how these things can and should work to increase both revenues and sales efficiency. I agree with you that you should always base these decisions on careful review of customer needs rather than your own preconceived ideas and that asking is much better than guessing. I'm thinking we need to open an office in Montana headed up by yours truly, preferably near some great ski slopes and hiking trails.
Posted @ Thursday, October 20, 2011 8:30 AM by John McTigue
John, This is a great article! I too have been going back and forth on this for some time. It is challenging. I am less worried about helping competitors since in my mind if competitors are basing their business on your business, they do not have things together and will struggle to get up to speed and keep up since we all are changing and improving over time. This brought up some interesting conversations as well. I know Paul has done this for some time and I think it makes it easier on the customer to know what their options are - A, B, or C (at least to start the conversation). Packages outlined and easy to understand is the key here I think. Do you find this to be the case? Keep up the great work guys!
Posted @ Thursday, October 20, 2011 10:06 AM by Dale Berkebile
Hi John, 
 
Like Dale, I've been back an forth on whether to post prices for my service packages. If it's a set service, than I think posting the price is a smart move. However, if it's dependent on a particular outcome or result for your client than it's a bit more challenging. 
 
I initially started with posting of my prices and got very little inquiries about it. Once I took off the prices and requested they contact me, I got more inquiries; where I was able then to further demonstrate value and create a relationship with the prospect.  
 
Jury is still out I guess. I'm not sure if there's a right or wrong answer, but mostly what works for you in your industry. I agree with you 100% though, it's ALL about stating your value and addressing objections head on. 
 
Great article. :)
Posted @ Monday, October 24, 2011 8:38 AM by Michele Welch
@Dale, @Michele - yes, simple is obviously better (for clients and for you). In practice you need to be able to customize, however. The beauty of the retainer based on hours is that you can customize services within the framework without locking yourself into a fixed set of services that needs to be requoted each time you make a strategy change. If clients want something in-between, I would challenge them about the budget and whether or not it can reasonably obtain the goals they have set. In most cases their preordained budget has no basis in goals and deliverables but is instead a pure guess.
Posted @ Monday, October 24, 2011 11:27 AM by John McTigue
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