Questions? (877) 643-7244
FutureNow Post
Friday, Jun. 22, 2007 at 11:12 am

Why’s B2B Price Such a Big Secret?

By Melissa Burdon
June 22nd, 2007

Mr. Smith (not Brad Pitt) walks into a bicycle shop asking for assistance in finding a bike for his daughter’s birthday. He quickly pipes up that he’s got a budget; he needs to find a bike under $500. This constraint would easily narrow down the options and the store clerk could continue to ask questions to help qualify which bike would work best for Mr. Smith’s daughter.

Let’s say Mr. Smith finds a bike that meets the requirements and asks, “How much does it cost?” and the store clerk avoids the question. Instead, he responds by giving Mr. Smith more technical info, then makes him fill out a ridiculously long form (like the one mentioned in Holly’s recent B2B post). Do you think he’d stand for this? Or would go to the next bike shop instead?

Some people are stuck on improving their online conversion rate with tactics–like button testing–alone . The problem is that, in order to really boost conversion, you need to sell in the way that the customer wants to buy. And that requires answering their questions and concerns in the order they’re likely asked.

B2B sites seem especially stubborn about listing price, but they omit at their own risk. Answering this would-be simple question is a critical step toward helping visitors gain the confidence to take action.

It’s usually companies that aren’t competing on price who want to keep price a secret. If a company doesn’t compete on price, they’re probably competing on quality; customer service or other factors. So, why avoid the question? Tell the visitor what your price is, even if it’s higher than your competitors’–just explain WHY it’s higher. If you don’t compete on price and your visitor is shopping on price, then that visitor isn’t your customer. Give him what he came searching for and sell him on your unique value. If that doesn’t work, don’t shy away from sending him elsewhere. That level of confidence is contagious, and often results in higher conversion, anyway.

mi8_price_button.jpgHere’s an example of a site that asks you to fill out a form of very personal information in order to get a quote. The only price listed here is “…mailboxes can start as low as $6.00 per mailbox,” but this doesn’t give the visitor context for how much he’ll need to spend according to his specific situation. He’d much rather see examples of different customers and what their service packages look like, along with (at least) ballpark pricing.

click meHere’s another example of a site that asks the visitor to contact them in order to get a quote. It’s understandable that in some industries you can’t give the visitor the exact dollar amount for a product/service. Still, the visitor should be able to get an idea of a price range or the price that one of your previous customers paid in order to get an idea of the price they’re really looking at.

We suggest clearly featuring price next to each product/service, with a Call to Action immediately nearby. If the price is custom, give estimates and show previous customer examples so the visitors sees what he’ll get for the money. In a lot of cases, we even recommend showing a comparison chart that allows visitors to easily view your price, feature and benefits right next to those of your competitors. If your price is higher, no big deal–just explain why you’re worth it.

If you hide your price, you’re losing customers. It’s that simple.

Add Your Comments

Comments (21)

  1. Great post, Melissa. You really got me thinking about this.

    It seems like there are a lot of different approaches to this issue, but we always seem to land on, “What is the role of the website?” Get the user enough well-organized information that they need to feel comfortable with the organization and the service, and get them in touch with a salesperson. Price is obviously at the top of the list in most cases, but business are often times scared to give that info out to the public so we have to do our best to create conversions in spite of it.

    I would be really interested to see a study done with somewhat high-ticket B2B items ($100,000+) that quantifies the increase in leads that occurs from just listing the price on the website!

  2. I hate that so much! It makes me suspicious that I’m going to get gouged and frustrated because I have to subject myself to a salesperson before I can do my first pass of decisions. Plus it brings up the “if you have to ask you can’t afford it” thought.

  3. Chris,

    We’re a B2B that does it. For instance, we give ballpark ranges for different service levels (see Persuasion Architecture™ for “a serious 6-figure investment”). But we’re able to get even more specific with low-to-mid five-figure website assessments like the Persuasive Scenario Analysis.

    Not trying to hype Future Now explicitly; just saying we’re not afraid to take our own medicine. :)

    When I was on the business development team here, a few people commented that we were “crazy” for putting our prices on the website. Without exception, those same people became clients. Could be a coincidence, but I think they appreciate the honesty–and it shows the ROI threshold we’re looking (way) beyond for them.

    -Robert

  4. [...] Heller ikkje B2B-kundar liker skjulte prisar [...]

  5. The paradoxical thing about this scenario is that the customer who most values your service is the one who is most likely to assume that you charge more than you do – and then not call because they assume that your (valuable!) service would cost too much. By not providing price you are actually screening out the very customers who would see the value in a high-service or high-quality offering.

  6. Posting your prices completely and thoroughly is a sign of confidence in your products and brand… and web users know this intuitively… If a vendor does not display their integrity then they get the ‘ClickFickle’ treatment that so many web sites get… 2 clicks and gone…

  7. Lack of confidence.
    And bad advice from their mentors.

    That’s why. ;)

  8. Okay – lots of people who are 100% on board. Anyone with horror stories, or instances where it didn’t work (or just valid reasons to be apprehensive)?

  9. I’d be interested in seeing some test results for differnet situations. The company I work for has tried testing showing a price upfront and being more discreat about it. Results for us showed that the more price visable version had lower conversion rates. Granted they are numerous variables that could contribute to that. One big one being we offered a free trial. Still it raises some questions.

  10. Ryan,

    This is an interesting point. For B2C, we often tell clients to make price visible in clear way on both product & category pages (which tend to be overlooked by some etailers who just want to funnel visitors to product pages with too little info).

    In terms of B2B, Melissa’s point is just that it shouldn’t be a secret. And, particularly with higher degrees of sales complexity–e.g., professional services like ours–it’s important to demonstrate value before just showing the price.

    It makes sense that a large price tag (or at least one that’s perceived as being high) could hurt conversions for a B2B site if it hasn’t properly explained the “why we’re worth it” factor. Although it may be, I’m not suggesting this is the case with your client, just that there are so many elements that go into creating a persuasive B2B site that you should be wary of not showing price just because it doesn’t seem to convert as well. On the contrary; it might suggest that not enough is being done to communicate value. So, testing whether the price is bolded or not is one thing, but what’s more important is the context, the placement of the price–and, most of all–how the experience has been planned.

    Does anyone want to click a ‘Buy Now’ button next to copy that says “Only $45,000!” Not likely… But removing the mystery behind price, and not forcing people to fill out ridiculous forms can definitely increase conversion big-time for lead-generation sites.

    Focusing on conversion alone can be misleading. This post should be helpful.

  11. Channel Conflict.

    Our B2B business model relies upon resellers who charge vastly different retail rates for our product, often bundling their own products and discounting ours heavily. Any mention of pricing on our website immediately draws harsh criticism from our resellers along with threats to discontinue doing business for fear that our company is attempting to “go direct” to the end user, thus making us competition against our resellers. It might be possible to get around this problem by posting wholesale “list” prices, but these prices are not competitive in the market. My guess is that this would immediately disqualify more customers than we would lose otherwise. However, testing is also difficult due to the same concern about backlash.

    Currently we have a contact form/800 number and a link to our reseller list, but no pricing.

    How have others solved this problem?

  12. [...] is a great post on Grokdotcom today about the reluctance of B2B companies to list pricing on their website. If you are competing [...]

  13. Interesting topic. We are both a B2C (residential) AND a B2B (commercial) retailer. We list residential product prices of course, but on most commercial products we prefer clients email us for a quote. We do this because we have competitors only interested in providing the lowest price with no regard to quality or service. This article brings our thinking into question…

    I have wondered if a “click for quote” button in place of a price tag on the product page would increase lead generation/conversion.

  14. Rick, At FutureNow we suggest that you prominently display price even if this isn’t your competitive advantage. Display your price and explain the extra value that you offer as this will attract those visitors who are shopping for this value. You could try displaying price and you can try displaying a click for quote button… why don’t you test it?! The results won’t lie if you set up the test properly.

  15. [...] is issue of qualifying the visitor in the first place. While most B2C sites display product prices, many B2B sites still struggle with this concept. Some people still have the dream that if I get a customer on the phone, I can sell him my products [...]

  16. We use EchoQuote. It solves all the problems of having pricing on your website and is cheap.

  17. Great article. Very true. Most would not stand for it. I’m surprized that some would not. We run a B2B portal called All World Automotive [ http://allworldautomotive.com ]. We require all vendors on the portal to list thier prices. This is what really generates the conversation. Of course one should be competitive.

  18. B2B sites do have more issues to solve before giving out price. Some are only perceived but others are real. Here are a few:

    Issue 1) The vendor can’t identify the visitor (it may be a competitor and we don’t want them to get our pricing) – This falls into the “perceived issue” category because your competitor already has your basic pricing. If you have a GSA Schedule with the Federal Government then your GSA pricing is already publicly displayed on GSAAdvantage.

    Issue 2) Different customers get different pricing levels. This is a legitimate issue especially with a vendor that sells its products through indirect sales channels. A single SKU (item) may have 20 different prices. Examples: Basic LIST price, Government GSA price, Educational price, Non-profit price, Registered VAR, Un-registered VAR, etc. There may be special Large integrator contracts with the likes of Lockheed, Northrop Grumman, EDS, etc…all have special pricing.

    The way Echoquote solves this problem is that it delivers its quotes via email using a minimum amount of additional information (name, phone, company, that’s it). Using the email address helps identify the visitor but you still get the visitors that want to remain anonymous using hotmail, yahoo or gmail accounts. That’s fine, it just takes a minute or two more to have the vendor’s reps approve those. It’s not a problem.

    The fact that you can create new pricing levels for new large customers on the fly gives us the appearance of being much larger than we really are…not a bad thing.

    Issue 3) Displaying pricing would allow the visitor to avoid the sales team. If price were the last thing the visitor needed then this is true. However, the answer is deeper than that. For an existing customer that already knows everything they need to know about the solution then price should be accessible. For visitors in the research phase of a project they may not fully understand the benefits of the offer/product and could draw an incorrect conclusion about the price.

    What we do at Federal Appliance is go ahead and approve List price regardless so the system will send them their quote with no hassle. We then follow-up 10 minutes later just to make sure there spam filter didn’t trap the quote and simply ask if they have “already put together” requirements for their project. If they have, fine, let us know if you need anything else. 99% of the time they are researching and we point them to our library that has some planning documents. That’s it. No pressure. No “are you ready to buy BS”.

    Issue 4) Complex product sets are difficult to configure. This is a real problem because to get an idea of what a “solution” costs may involve multiple components. Once again, we solve this using Echoquote’s kit feature. It is a simple way to have a visitor request the “X250 package”. The visitor is shown all the items in the package with advice that explains whether each one is Required, Recommended or Optional. The visitor makes the decision to include each item. It gently leads the visitor down the right path.

    Issue 5) The website is generally owned by marketing which has limited IT staff. The IT staff of most vendors is concentrated on the product itself, not the website. To solve all of these issues would take some concentrated development time so that is why we outsource it.

    There are probably more issues but these were the big ones we set out to solve.

    I am not here to pitch what we do but if you want to simply see how our self-service pricing works feel free to visit us and request a quote. Since most visitors understand what they want when them come you should request a “Equal PS50″ Product Group and choose “Add All”. Notice that you are running on Echoquote’s portal once you click on Self-Service Pricing.

    Please use the following link so we will know that you are just testing it.

    http://www.federalappliance.com/index.php?&source=grok

    Dale

  19. [...] from http://www.grokdotcom.com It’s usually companies that aren’t competing on price who want to keep price a secret. If a [...]

  20. Great post. I agree with it in most business scenerios. For companies that sell internationally and prices range with currency, quantity, tariffs and other factors, may be not.

    Also, companies with diverse distributor channels would also be challenged with this approach.

    Both of those are not B2B scenarios as much as what I call B3B (cube) scenarios and require a different strategy.

    But, for a B2B company that only sell in one county (and may be Canada ;) you are right! Show the price and sell/compete on other factors.

  21. Disagree with the above. We’re in a global world, and including currencies and global pricing etc lets the customer know that your doors are open to doing business with them.

Add Your Comments

 

Print this Article
Share

Melissa is a Senior Persuasion Analyst at FutureNow.

More articles from Melissa Burdon

Marketing Optimization Blog
FREE Newsletter Sign-Up
send it once every: