Making the decision to put prices on your website is not easy for any company.
A lot of businesses are inclined to believe that by publishing prices on their web, they are exposing themselves to competitors. And on top of that, they might even become more vulnerable in front of potential buyers who could want to negotiate the price knowing about it beforehand.
Should you put prices on your website? 10 key factors to consider
What if my competitors use it against me? What if users go away without converting? Of course, these concerns are completely understandable. And, in many cases – justified.
Source: Piko Rizky Dwinanto
However, price transparency can also be a really powerful tool for establishing long-term relationships with your clients. And even gaining their absolute trust. This is especially true for B2B companies, where customers are fewer but bigger, and it is more difficult to make them convert.
So, here comes the hard question. Should your B2B company publish its pricing? In what cases? Today, we will try to define the best (and the worst situations) to put prices on your web. And because you can’t make this decision by relying on only one factor, we will try to solve this enigma step by step.
In the end of the article you will find a Quiz with 10 questions designed to help you make this decision. Let’s go!
1. Is pricing your competitive advantage?
While some companies go for a Differentiation strategy, a lot of businesses rely on a Low-price strategy to obtain a competitive advantage on the market. If you are competing on low prices instead of differentiation through unique products, you might want to publish your pricing.
Especially if you are confident that your prices are the lowest on the market for this product.
In this case, price transparency will benefit you because you are making a bold statement about your affordable products. However, also because you make it easier for your customers to do their research and indeed discover that you are offering the lowest prices on the market.
Of course, the answer is not that simple either. Depending on your industry and business model, prices can be either easy or difficult to change by your competitors so they can counterattack your position.
For example, it might not be easy for B2C companies that sell physical products to final customers to change their prices quickly. Physical products, such as clothes, watches or food, have a lot of costs associated with production, logistics and transportation, and there are often many players involved.
For them, changing prices because they saw yours on the web will be a slow and carefully calculated decision. As there are various costs and multiple players, companies will have to make sure that everyone is satisfied.
However, for B2B companies can be different, especially if they are selling non-tangible products or services. Let’s take Marketing or Consulting agencies, for example. They can easily adapt their offer to lower the price, and still have a higher margin to operate on.
For this reason, it is important to consider your sector, the tangibility of your product, and the possibility for your competitors to counter react within a short period of time.
2. Are you operating in a highly competitive sector?
This question is a little bit trickier than the previous one. Companies in highly competitive sectors usually struggle to find out a sustainable point of differentiation. This means that a lot of times, price transparency could be a double-edged sword.
This means that you have two options:
- You could play safe and keep your prices behind the scenes;
- Or you could bet on them as a key point of differentiation.
In extremely competitive sectors, listing your prices can sometimes make you vulnerable in front of your competitors. The main reason why is because they can easily see it, and adjust their prices to make a better offer.
So, unless you are really confident with your prices and the way you communicate them, you might want to think twice.
However, if you are in a sector with a middle-level competition, you might want to put prices on your web. This is good not only because you provide transparency for customers, but also because they can better understand your product. We are not talking about really niche sectors here – we will see them in a minute.
For example, let’s take a Software-as-a-Service company with a really innovative service that people don’t understand very well. If it’s seems too complex for them, they might automatically think that it will be really expensive. So, they will leave your website without further research.
In this case, putting prices on your web will be a good way to show potential customers that your product is actually affordable.
3. Have you set a standard pricing?
A lot of companies in the B2B industry don’t have a standard pricing. Instead, they tailor it according to their customer’s needs, project requirements, and other factors.
If your pricing is standard (for example, SaaS subscription-based plans), and it won’t differ from customer to customer, you might want to publish it on your web.
This way, you potential customers can see that your prices are equal for everyone. And you are not going to charge them more only because they appear to be a bigger company with more budget. Which, on another hand, significantly increases their trust.
Additionally, you can consider these two options:
- For a starter, you can publish a few standard plans that come with pre-defined pricing and features. And then, you can add a Custom plan where you don’t specify pricing (such as the one in the image above). This way, it can be negotiable depending on the needs of the company. By doing so, you can give some pricing orientation to your customers without revealing the full picture, and still leave some room for negotiation.
- Stating an initial price, but without setting an upper limit. This option helps users understand what is the minimum price for your service while keeping discussion open. For example, you can simply publish “Prices start at _____ EUR price”.
If your product is not so well-defined and your pricing is not exactly standard, you can still consider the second option. Or evaluate the possibility to design a standard plan for customers that share common needs while keeping a custom plan for the rest.
And of course, you still have the option to not put prices on your web if you don’t feel comfortable about it.
4. Do you have a longer sales cycle?
Some B2B companies have a long sales cycle before closing a deal. So, their priority is to build long-term relationships with their clients where win-win is the perfect outcome.
If you are one of these companies, and you would rather take the time to learn the specific needs of each customer instead of closing the deal as soon as possible, then don’t publish prices.
In these cases, listing fixed prices usually doesn’t leave room for negotiation (unless you indicate otherwise). As a result, you might distance potential customers who are willing to discuss your offering.
5. Is transparency a part of your company’s philosophy?
Many companies claim that being transparent with their customers and providers is one of their most important values. And then, they fail to align these values with their actual Marketing message (whether unintentionally or not).
If your company’s philosophy is based on transparency, then you should align every single aspect of your business with it, including prices. By doing so, you will gain the trust of both your customers and providers. And they will be able to see that you remain honest with yourself and your values.
6. Are you in a very niche market?
We already talked about highly competitive B2B industries, and also about markets with middle-level competition. But what happens when your company is operating in a very specific niche? What should be your pricing approach?
If you are selling products or services in a very niche B2B market, the chances are that you only have just a couple of competitors. And that your target customers are familiar with all of them.
In such cases, publishing your prices could be rather dangerous because your competitors constantly have an eye on you. They follow your every move, and are ready to quickly react to it. Which might not be necessarily the case in other industries where competition is so high that you could remain unseen in the crowd.
However, in niche markets both competitors and customers know the important players really well, and every movement you make should be carefully planned. In case you decide to still list your prices, don’t forget to make a good and profound evaluation before making the final decision.
7. Do you have many leads that are not in your target market?
For B2B companies looking for customers that handle large volume of operations, pricing could be a really effective filter for unqualified leads. For example, I used to work at a company that offered a Payment Gateway to large and middle-sized companies and enterprises.
So, our pricing is adapted to bigger-sized businesses.
However, we had a lot of unqualified leads coming from different Marketing channels. They didn’t make enough payment transactions for us to justify our costs for providing them with our service. So, we weren’t interested in investing budget nor receiving leads from small companies.
In this case, listing your prices could be a great way to filter customers that are not within your target market.
8. Do you have more leads than you can handle?
We just talked about pricing as an effective filter for unqualified leads, and having more leads than you can actually handle is another situation where it might be better to list your prices.
Handling potential customers is very costly. So, some small companies that don’t have a Sales Department (or it’s really small) can’t really afford to waste time on users that won’t convert or won’t bring enough revenue to cover all the costs.
Especially in the B2B industry, where the sales cycle is much longer, and it is very important to spend time in the most efficient way.
For this reason, companies that aren’t able to handle a large number of low-quality leads could use pricing to set up an additional filter.
9. Is your price justified?
At first, this question might not make complete sense. You will say: “Of course my price is justified!” But let me explain what I mean.
I’ve worked in small startups that are conscious about their pricing. However, they can’t lower it as much as their bigger-sized competitors because they can’t scale their costs the same way. In cases like that, they know that their pricing is not justified, but they are still in the process of cutting costs before making their product more affordable.
If this is your case, listing prices that are excessively high in comparison with the competition could be a dangerous move.
Instead, try to leave a room for negotiation where you can directly talk to your customers in a face-to-face conversation. This way, you can show them in practice what is the added value that they are getting from your product besides from the pricing.
10. Do you care about SEO?
As Hubspot already talked about, listing prices is a golden Search Engine Optimization opportunity for B2B companies that want to position in front of their competitors. Terms and phrases that contain keywords such as “price” are excellent, because they usually have a high search volume.
And what’s better, little to no competition as a result from companies not wanting to put prices on their web.
By creating a compelling Landing Page and optimizing it for qualified traffic based on price, you will improve your positioning on Google, and you will effectively join the market conversation about pricing.
Should B2B companies put prices on their website? – THE ANSWER
Now that we’ve discussed this question from various perspectives, it is time to give you an answer. As a B2B company, should you publish prices on your web?
The answer is: it depends. Yes, we all hate this answer, but it is true. It really depends on your Marketing strategy, business goals, priorities, competition, and industry, among hundreds of other factors.
But don’t worry – to help you find out the best approach for your company, I’ve designed a short Quiz of 10 questions. The rules are simple: if you have more Yes than No, my recommendation is to list prices on your web. However, if you’ve answered No more times than you’ve marked Yes, then it might not be such a good idea.
Disclaimer: These questions and article are purely from my experience and perspective, so they are just a recommendation. I am by no means a Pricing specialist, and I don’t claim to know what exactly is perfect for you. This quiz is designed to give you some guidance, but it doesn’t mean that there aren’t other factors that might affect you!
Tip: If you are having trouble understanding a question, each question in the Quiz corresponds to the same number in the article, where it is explained in detail from my perspective. If you still have questions, let me know in the comments!