Price transparency is not an easy decision. Many companies are inclined to believe that by publishing prices on their web, they are exposing themselves to competitors, and are even becoming more vulnerable in front of potential buyers. Concerns such as “What if my competitors use it against me?” or “What if users go away without converting?” 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 gaining their absolute trust. Especially for B2B companies, where customers are fewer but bigger, this could represent an incredible opportunity.
And 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 list 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 the same kind of product.
In this case, price transparency will benefit you not only because you are making a bold statement about your affordable products, but 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.
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, and price transparency could be a double-edged sword. This means that you could either 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, as they can easily see it and adjust their prices to make a better offer. However, if you are confident that your product has a good price-quality relationship and your Marketing message communicates well the value that you provide to your customers, go for it.
If you still need to work on your price-quality relationship and your Marketing message, you might not want to publish your prices yet.
3. Have you set a standard pricing?
A lot of companies in the B2B industry don’t have a standard pricing and 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.
Additionally, you can consider these two options:
- Publishing a a few standard plans that come with pre-defined pricing and features, and a Custom plan where you don’t specify pricing (such as the one in the image above), which will be negotiable depending on the needs of the company. This way, you can give some pricing orientation to your customers without revealing the full picture, and you still leave a 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 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.
4. Do you have a longer sales cycle?
Some B2B companies have a long sales cycle before closing a deal, and 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 prices usually doesn’t leave room for negotiation (unless you indicate otherwise), and 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, but 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, but what happens when your company is operating in a 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 a few competitors, and your target customers are familiar with all of them. In such cases, publishing your prices could be rather dangerous because your competitors always have an eye on you – 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 forg
et to evaluate all the advantages and risks that come with this 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, the company I work at offers a Payment Gateway to middle-sized companies and enterprises, and our pricing is adapted to bigger-sized businesses.
However, we have a lot of leads coming from different Marketing channels that don’t handle enough transactions to justify our costs for providing them with our service. 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 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, and 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 volumes are usually higher than B2C, but the sales cycle is much longer, 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, but they can’t lower it as much as their bigger-sized competitors because otherwise they won’t be able to cover costs. 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 – even if its at a higher price.
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 little to no competition as a result from companies not wanting to publish their prices.
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 publish their prices? – THE ANSWER
Now that we’ve discussed this question from various perspectives, it is time to give you an answer: as a digital 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!