May 13, 2008

New Chart: Should Tech Marketers Hide Prices?

SUMMARY: Pricing has long been one of the sacred cows of technology marketing … all marketing, really. Companies are uncomfortable releasing their prices when it can scare off a prospect, be matched, bettered, negotiated down, etc. 82% of technology marketers keep their pricing at least “somewhat” confidential -- prospects must reach out to the company.

How is the Internet interacting with this time-tested model? There is evidence that keeping pricing close to the vest may cut companies off from new prospects, hot prospects and may not even have its intended purpose -- giving sales flexibility in pricing.
Chart: Being Upfront About Pricing Can Help Tech Vendors Convert Prospects

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Being open about pricing is an asset, at least some of the time. 89% of decision-makers were able to recall a purchase when open pricing had a specific impact on the progress of the purchase. However, not all products and services are equal in this regard. The more consideration and cost that a product requires, the less likely it is that having open pricing will be enough to shortlist a vendor. Furthermore, in cases where companies require a rapid turnaround, open pricing can make the sale before you even “meet” the prospect.

Consider this anecdote from a post-survey interview: a growing software company realized the need to upgrade their physical printing of manuals to include full color. They went looking for a printer who could meet their volume and time constraints.

In the words of the Marketing Director: “First of all, every website looked the same, so I couldn’t tell who was big and who was small – they all looked small from their sites. Bad design, no functionality. I tried calling a few to get quotes, sent a few emails and didn’t hear back from some and heard back later in the week from others. It blew my mind – I was looking to give the first decent candidate 25,000 full color books to print in two weeks. Finally, I found a site that had a pricing calculator that got me started, and it turned out that the final price was 5% lower after we haggled a bit. That JavaScript calculator made them a lot of money.”

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