Pricing Transparency Needed
for Comparison Shopping
Picture this… you’ve decided it’s time to make a purchase (big or small). You have a general idea of what you’re looking for, but haven’t settled on where you’re gonna spend your hard-earned cash.
Like most people, you go to your favorite search engine to do a little comparison shopping. You start going through the search results following the links to get some answers to your questions.
One of your big questions is about the cost. Does this mean that you’ll buy the item at the lowest price? Not necessarily, BUT pricing information is important to you in making a final decision.
So, how would you feel if you were met with the following options as you tried to determine the cost of your desired product/service?
- Get in touch
- Log in for pricing
- Contact us for pricing
- We just need a few details
- Fill out the form below and we will get back to you
Does the word FRUSTRATED come to mind?
When a business refrains from displaying pricing options on their website it makes me wonder the following…
- Do they think that I’m not intelligent enough to read and understand?
- Do they believe that I’m not competent enough to make an un-assisted purchasing decision?
- Are they applying sleazy, behind-the-scenes price segmentation tactics to find ways to overcharge me?
A lack of pricing transparency does NOT encourage me to put trust in that company.
Consumers Want Pricing Transparency
Research shows that “clearly stated pricing/shipping information” is the #1 thing that consumers expect when shopping online.
Despite such evidence, some businesses in certain industries and/or places continue to make it difficult for consumers to have pricing information.This lack of pricing transparency on websites appears to be more rampant in the B2B world.
According to the B2B Usability research done by the Nielsen Norman Group,
Many business-to-business (B2B) sites are stuck in the 1990s in their attitude toward the user experience. Most B2B sites emphasize internally focused design, fail to answer customers’ main questions or concerns, and block prospects’ paths as they search for companies to place on their shortlists.
These sites haven’t realized that the Web has reversed the company-customer relationship. Most online interactions are demand-driven: you either give people what they want or watch as they abandon your site for the competition’s.
The reports discusses the proliferation of User-Hostile Design of many B2B websites and states:
B2B sites often prevent users from getting the information they need to research solutions.
The most user-hostile element of most B2B sites is a complete lack of pricing information.
The average B2B user experience is not very supportive of customers. As a result, the websites fail to provide business value because they ultimately turn prospects away rather than turning them into leads.
Why would businesses HIDE their prices deep within their site or not make it available at all?
Segmentation and Pricing Transparency
In another report, State the Price to Give B2B Sites a Competitive Advantage, the Nielsen Norman Group offers the follow reasons (i.e. EXCUSES) cited by companies for not revealing their prices online:
- we don’t want our competitors to know,
- price varies for different customers,
- price constantly fluctuates,
- customized services have unique prices, and so on.
Such excuses focus, in one way or another, on segmentation in the marketplace. In the article, Price Segmentation vs. Product Segmentation, Ian Linton provides this explanation…
Segmentation is a technique used to identify and satisfy the needs of specific groups of customers with similar requirements within a market. Segmentation is an alternative to offering a “one size fits all” product to all markets.
With a price segmentation [or price discrimination] strategy, you offer the same product at different prices to different groups.
If you operate a product segmentation [or product discrimination] strategy, you offer different versions of a product to different groups.
Segmentation is most effective when you can identify clear differences in market requirements.
Yes, segmentation is NOT an inherently bad thing. It has its place, and when executed properly can benefit both a business and its customers.
The barriers that a company uses to separate one segment of buyers from another are called segmentation hedges and are based on consumer demographics or business demographics (aka firmographics). The following table explains…
Segmentation is commonplace and can be advantageous for both a business and its customers. It can be used WITHOUT hiding vital pricing information.
Pricing Transparency as a Marketing Strategy
The reality is that we live in the INFORMATION age. The expectation that legitimate businesses will have a web presence WITH relevant information including PRICES will continue to grow!
People PREFER to compare features, benefits, and prices BEFORE contacting a business. When faced with multiple business choices, they will rarely, if ever, give a second thought to the ones that do not provide such information in an easy-to-find way.
In fact, the Nielsen Norman Group found that…
participants go to competitors’ sites when websites do not show prices.
If pricing information can be found elsewhere, that’s where users will be. The first few websites that seem to have good product information (including pricing) will most likely make a candidate’s shortlist.
If the type of product you sell or service you offer does not easily lend itself to providing exact prices, then show price ranges or sample prices.
For those businesses out there in industries/places where lack of disclosure and lack of transparency is the norm – BE WARNED! Sooner or later, a competitor who is BRAVE enough to challenge the status quo will come along and they will meet with success.
Pricing Transparency and YOU
If you are a professional service provider or a business owner in the automotive, construction, healthcare, hospitality, or legal industries and you are FED UP being faced with only over-priced, under-valued advertising options; then have heart!
A game-changer has arrived!
- One that has heard your pain.
- One that recognizes your intelligence.
- One that is NOT afraid of pricing transparency.
- One that believes in your ability to make the right decision.
- One that refuses to sit in the shadows and watch you be preyed upon.
- One that has your back and will look out for your interest.
- One that wants to help you rather than hurt you.
When you are ready to say NO MORE to…
- unnecessary hand-holding,
- lack of pricing transparency in business,
- one-sided, they-win-you-lose contracts,
- being subjected to aggressive sales tactics,
- being treated less than you are,
seek out this ONE and take back your power!
In our next installment of Through Their Eyes, we’ll examine the issue of negative reviews and how they can be used to attract more customers to your business.
In the Meantime…
The following resources might help further clarify some of the points discussed above:
Also take a look at our “Customer Service – the Good, the Bad, the Ugly” board on Pinterest for some more insights.
Follow iBeFound International Ltd’s board Customer Service – the Good, the Bad, the Ugly on Pinterest.
Time for YOUR input
- How important is finding pricing information on websites to you?
- What are your views on segmentation?
- Business Owners: What methods of segmentation have you found to be successful?