Pricing Transparency: A Real Valued Proposition
Why can’t you just tell me what you charge?
Have you recently been to a B2B website that asks for all your info before giving you a price quote? You ask yourself, “Why do they need this much information, can’t they just provide me with the info without getting every detail about what I had for supper, what my hair color was at birth, etc. Just tell me what you charge and let me decide from there. I am not ready to make any decisions yet, I am not there yet. Why can’t pricing transparency be the standard for doing business?”
You would think these companies are working in the health insurance industry!
Three reasons pricing transparency helps your business
1. Pricing transparency builds trust
I know it bothers me when companies are so secretive about their pricing. Are they nervous about losing their standing in the industry? Granted, if you are the sole maker of a certain item or if you are selling a commodity, I can understand why it is you don’t want people to know too much about your pricing or specifics about your product or service. You have to be safe and smart, while also really taking into account what is worth sharing.
If you are a service provider, you need to leverage price transparency to your advantage. In a recent survey conducted by Local Search Association, they found that 86% of SMBs (small and mid-sized businesses) felt that a clear statement of pricing or costs from providers was very or extremely important and 38% of SMBs felt it is difficult to find a provider they can trust. Interestingly enough, it was very telling to both my business partner and I when we checked our Google Analytics and saw that after our homepage, our most visited page on our website was our plans & pricing page.
While being transparent potentially allows your competitor to undercut your prices, you have much more to gain by sharing. The foundation of any good relationship is trust. Transparency helps build that trust. If a company or person doesn’t share information but rather chooses to keep everything close to the vest, this will only erode trust instead of building it.
Consumers want to feel empowered with enough information to make an informed decision. By providing such information instead of withholding it, you are telling your customers that you value what’s best for their business, not yours. Your focus is helping the customer to make a purchase and not you trying to make a sale. This customer-centric approach will only help you in the long run. This is based on a very interesting phenomenon called “common sense”. Even if they do not ultimately choose you as their provider, they will have good things to say about you and be that great referral source as time goes on. You may have lost in the short term but the upside potential for leads and referrals go up exponentially.
2. Price transparency sifts out the unqualified leads
There are many annoying leads that we receive on a daily basis that turn out to be complete duds. I remember, in a previous job of mine selling commodities, there were typically two types of potential customers, ‘loyal’ and ‘penny pinchers’. The loyal customers never switched since they were……….take a guess….. that’s right….LOYAL. So I was stuck going after the penny pinchers who switched to me because of my great customer service, right?? Not so much. It was because I charged $1 less than the competition. It was tough when the following week, General John G. Penny Pincher had found a cheaper alternative. You invest all the time and energy cultivating a relationship only to have it evaporate because they valued price over service. Having your pricing available on your website will automatically stop those phone calls which you don’t want to waste your time with anyways.
3. Price is not a long term competitive advantage
There is also another important factor to your business and your transparency. You are unique and no one can replicate that. You are your business’ actual value proposition and competitive advantage. Your price is what you charge for service but the value you bring to the table is more than just price. The way you interact with your customers, taking the time to answer their questions, handle complaints or concerns, exceeding their expectations etc. is a testament to what you do which validates your cost. If you are sure of yourself and what you can do, your price will speak for itself.
If you allow for your business to be more open about what it does and what you charge, you stand to gain much more in the long run. More leads, more customers and most importantly for the business, more bottom line. For more tips and ideas on how to increase your transparency and better your business, contact the LocalBizGuru at 855-970-GURU (4878).