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Join Our Research Team at DMA 2014
Dec 17, 2007
Blog Post

SherpaBlog: Should You Reveal Pricing Online? Overcoming Fear & Loathing ...

SUMMARY: No summary available.
By Anne Holland, Content Director

If you’re in a services or B-to-B marketplace -- enterprise software, for example -- the last thing you’re probably doing is posting your prices on the company website.

Study after study reveals, however, that pricing information is precisely what prospects visiting your site are looking for:

- A June 2007 MarketingSherpa Study in partnership with Enquiro showed that pricing information was the No. 1 thing executives researching IT solutions in price ranges above $50,000 wanted online during every stage of their decision -- from early awareness and research on.

- CMP Electronics Group’s Global Media Usage Study in 2006 showed similar results. 61% of surveyed engineers said the top reason they went to company websites was to research pricing. Prices were second only in popularity to downloadable data sheets.

- A 2006 ThomasNet study revealed 74% of prospects researching on their site wanted to see manufacturers pricing information there. However, only 23% of manufacturers made their pricing public online.

I understand why you may not put pricing online. Perhaps your sales reps want as much flexibility as possible in negotiations. Maybe you’re concerned making price wars and/or commoditization. Or, perhaps your product managers are convinced pricing is far too complex even for an online calculator to reflect accurately.

Whatever the reason, you need to keep two human factors in mind:

#1. Your competition already knows your pricing because they have to sell against it. There is no secrecy. Frankly, if they don’t, they are so inept at their jobs that you have nothing to fear from them.

#2. Your prospects will find pricing information even without your help. They’ll ask friends at other companies, post queries to industry email discussion groups and boards, ping analysts or surf the Web researching.

The only problem is, you’ve now lost control of your pricing messaging. You can’t surround the conversation with value and branding. You can’t be sure that the correct information is even getting to prospects.

And they’re making those decisions before they agree (or not) to meet with your sales reps. Because pricing information is now sought much higher up in the sales funnel than most marketers suspect.

The good news is that most of your competitors face the same problem. Revealing your pricing -- with all appropriate branding and lead generation flourishes -- can become a competitive advantage for you in 2008.

Happy Holidays!

Comments about this Blog Entry

Dec 17, 2007 - Lev Wood of Midwestern Software Solutions says:
We publish our software prices on our website in plain view so any prospec can see the price structure. Some of our services are custom so we can't price those. I can't tell if it's hurt us or helped us but I do know that most prospects like seeing it there on our website.


Dec 19, 2007 - Susan Orr of ThomasNet.com says:
Thanks Anne…your comments on why manufacturers should not be afraid of posting their prices is right on target. While ThomasNet (and Google) found that pricing is a key piece of information that engineers and buyers look for online, we also recognize that the majority of industrial businesses, of which 50% are custom suppliers, will not be in a position to post prices. For suppliers who have distributor relationships, there are simple ways to route orders…or leads directly to a distributor. Many suppliers find it’s best to post “retail” pricing or provide fast ways to contact the supplier to get pricing. However, the biggest disconnect we found in our research was the lack of detailed and searchable product information. Suppliers who have PDFs of their print catalogs said they were providing information, but buyers are not satisfied with this because this type of information is hard to navigate and drill down to the detailed information they need such as size or tolerance parameters for example. Buyers tell us that they expect specific product information in an easy to use, easy-to-navigate format above everything else so that they can make an informed buying decision. Buyers recognize that pricing is subject to negotiation based on quantity, relationships, shipping, etc. So, the starting point for suppliers should be to assess what information they are providing on their websites and whether they are helping buyers to easily access that information before they can determine whether pricing is appropriate for them to provide online.


Dec 26, 2007 - Gary J LaRoy of Natural Path Marketing LLC says:
While I am in a different sector than the IT providers, I find there is little transparency in the Advertising Agency sector of the industry. From my personal observations most agencies base their compensation on the volume their client spends, not, necessarily, on the value they bring. For example, an agency does not add a proportionate amount of value when they book a $100,000 media buy over a $25,000 media buy. However, unless there is pressure from the client, the agency will take their additional earnings to the bank. I witnessed a similar situation in the travel industry where agencies earned their commission, strictly on the basis of convenience. Few added any true value to the transaction. I believe time will reflect a change in the compensation paradigm in this industry. This will cause a shockwave in the halls of those agencies who do not add true value to the transaction.


Dec 31, 2007 - Dale Underwood of EchoQuote says:
This is tricky. I think there needs to be a clear distinction between simply publishing B2B pricing online and using pricing as another tool to successfully engage quality prospects. If a company simply publishes all of their pricing then they may actually hurt their chances of engaging qualifed prospects. First, prospects may not be familiar with the product set and be unable to correctly identify the items they need leading to either over- or under-pricing the solution. Second, there may be advantages that the prospect is not aware of and if the sales team is not able to deliver the value proposition a prospect may buy an inferior product without knowing it. On the other hand, using the PROMISE of self-service pricing as another call to action solves 3 problems at once: 1) The end-user gets a reasonable budgetary price quickly, building trust (per a MarketingSherpa Boston track the response time should be less than 5 minutes), 2) the sales team is tied into the process since pricing is a sales function and 3) the marketing team can easily measure the value of the request because it has a true price associated with it. A deeper discussion about manual versus automated ways to provide pricing is needed. Automation can help but there are obstacles and few marketing groups have the budget to handle it in-house.



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