Should product/service prices be listed on your website?


7

In Camels and Rubber Duckies, Joel Spolsky discusses what he believes to be a poor pricing decision:

Bad Idea #2: How Much Money Do You Have? Pricing. This is the kind used by software
startups founded by ex-Oracle salesmen
where the price isn't on the website
anywhere. No matter how much you
search to find the price, all you get
is a form to provide your name,
address, phone number, and fax number,
for some reason, not that they're ever
going to fax you anything.


It's pretty obvious here that the plan
is to have a salesman call you up and
figure out how much you're worth, and
then charge you that much. Perfect
segmentation!


This doesn't work so good either.
First of all, the low end buyers are
just going to move on. They will
assume that if the price isn't listed,
they can't afford it. Second, the
people who don't like salesmen
harassing them will just move on.


Worse, as soon as you send a message
that your price is negotiable, you're
going to end up reverse segmenting.
Here's why: the big companies you sell
to, the ones who should be willing to
give you the most money, are
incredibly sophisticated about
purchasing. They'll notice that your
sales guy or gal is working on
commission, and they'll know that he's
got quarterly quotas, and they'll know
that both the salesperson and the
company are going to be incredibly
desperate to make a sale at the end of
the quarter (the salesperson to get
his commission, and the company to
avoid getting their knees shot off by
their VCs or Wall Street). So the big
customers will always wait until the
last day in the quarter and end up
getting a ridiculously good price
which somehow involves weird
accounting shenanigans so the company
can book a lot of revenue that they're
never really going to get.

Do you agree? Should product price lists be on the website?

Note that I'm referring to relatively expensive purchases (thousands of $ after all users/options purchased), as opposed to like a one-off $29.95 texteditor or something.

Pricing

asked Oct 15 '09 at 15:39
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Alex Papadimoulis
5,901 points

8 Answers


8

If the thing you're selling is undefined ("complex solutions"), then of course you can't price it. By definition?

But if you're selling software, there's some good reasons to post prices, the biggest of which is that you have a strong negotiating position, in that you don't negotiate.

"We need a discount" can be countered with "All our customers pay the same," which is only a credible statement if you publish your prices. And all big customers will ask for discounts.

Here's more about the "discount gambit " and more reasons for having fixed, published pricing.

Besides, it's just honest.

answered Oct 15 '09 at 15:47
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Jason
16,241 points
  • Haha! That's great - *93% discount* - I totally forgot about that story. And good timing: next sales meeting is on negotiation :-). Ok, so obviously we'll never discount like that. I just have a hard time seeing no discounts for people who buy early, buy in quantity, pay fast, etc - "we treat all customers the same" seems to be contrary to "we will take special care of you", right? – Alex Papadimoulis 7 years ago
  • RE: "can't price complex solutions" - we do have pricing guides and sheets for internal use, so theoretically we could publish those. And we do have hourly rates for services... but I think that puts the burden on the customer to understand what they need ("will it take four or eighty hours? do i want a per-user? do i need targeting? etc") – Alex Papadimoulis 7 years ago
  • An "internal guide" shouldn't be published because it's not a commitment you want to make with someone. And note I didn't say "we treat all customers the same." I said they PAY the same. But again in your case if each situation is unique, obviously nothing will a priori be the same. – Jason 7 years ago
  • Perhaps the best answer I have heard to 'we need a discount' is - "yes, our next discount is available you should need to buy n more licenses" – Vineet 7 years ago
  • @Vineet -- Yes that's usually my response. But also if you *wanted* to do a real discount for some weird circumstance.... it's your company! You can just do it. – Jason 7 years ago
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3

When I'm looking for a solution/product to buy I ran away from websites without pricing.

If someone writes "contact us for pricing " that reads "contact us so we can rob you ".

  • If you are rich we can charge you a lot, sell you stuff you don't need.
  • If you are poor, we can still get something out of you

It's going to be either too expensive or tricky, but always dirty.

When it comes to the solutions require custom packages, different modules, different requirements put a sample case study with pricing so I can predict the cost before your crazy salesman steal 30 minutes of my precious life for something I won't buy with that price tag.

Not listing the price is doing the perfect market segmentation, charging as much as the customer willing to pay. Yet it's so dirty almost all customers in the world hate it.

answered Oct 15 '09 at 19:07
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The Dictator
2,305 points
  • I think it's not even so great a segmentation, unless you as a person are really great at negotiating. I, for one, kind of suck at it, so I just don't. – Hanno Fietz 7 years ago
  • There is another reason for this - not to help competitors with pricing. – Tim J 7 years ago
  • > Tim so you think competitors can't call you and get a quote if they need to learn your pricing ? – The Dictator 7 years ago
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3

Several questions for consideration:

  1. How expensive is your product? For low-cost products the choice to post prices is obvious.
  2. How many customers do you have or are planning to have? The more customers, the more difficult it is to maintain different pricing schedules for every customer as well as implement service price increases.
  3. Is your competition posting their prices? You may want to either set yourself apart or follow the industry convention.
  4. How good a negotiator are you and your staff? "Call for price" sends a clear signal that anything you quote will be negotiable.

Our product follows the "software as a service" model with a tiered pricing schedule. The monthly cost ranges from a few hundred to a few thousand dollars per month. I decided to make our pricing public because I think our fees are very reasonable and because personally I almost never "call for price."

answered Oct 24 '09 at 19:10
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Oleg Barshay
2,091 points

2

Self answering because my opinion is different than the question. For many years, I wholeheartedly agreed with this: not listing the price is simply a way for some salesman to harass me into a price. Thank you but no thank you, next!

But I've since changed my mind on this. We do not, and will not, list prices for our products or services. The reason is simple: we do not sell a commodity, but instead complex and customized packages. And, since we can work with customers that range from 2 to 20,000+ employees, our packages cannot be one-size-fits-all.

While anything can of course be broken down to "per user costs" (software) or "per mili impressions" (advertising), it's different for everyone based on the options, modules, targeting, etc. I think it would be a disservice to clients to start the conversation with prices, since we can't know what they'll be without assessing their needs. In fact, we don't even know if our product/service will even be a good fit without knowing what they need, and we certainly don't want to sell to those who don't need.

It's not about How Much Money Do You Have? but How Can We Work Together To Deliver Maximum Value?

answered Oct 15 '09 at 15:43
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Alex Papadimoulis
5,901 points

1

If the product is concrete (i.e. you're delivering the same product to each customer), then I believe the pricing should be public on the website.

As a consumer, it really pisses me off if a company hides their pricing. It says to me "your time is not important - we'll decide when to give you the information you're looking for ". What I say to them is "Well, I'm not clicking your contact button, I'm off to your competitor ".

Of course the company has no idea this is happening. Here's the way to measure it - have a 'Pricing' link that takes people to your 'Contact Us' form. See how many people abandon your site from that page.

answered Oct 15 '09 at 22:57
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Denis Hennessy
1,363 points

1

If you have an off-the-shelf product, it's usually good practice to publish your pricing. If your product is customized for each customer, or there are many options to consider, it's often best to have your sales team walk prospective customers through the process.

In certain industries, there are other factors at work. If your company regularly competes for government contracts in a bidding process, you won't publish your prices. After all, you'd let your competition know the price they have to beat.

answered Oct 17 '09 at 04:07
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D Thrasher
894 points

1

I have a price list that is going to be published on my website and is already given away to anybody who wants it. So I'm all for open pricing.

Note that I favor open pricing although my product tends to fall in the salesman-calls-you kind of category, in that is not commodity software, mainly targets large enterprise customers and may involve customization.

My most important reason for this is that I don't have a salesman to call and negotiate, to begin with, and am not too good at negotiating myself. Second, there's small and medium businesses who are a potentially large audience for my product (I haven't had time to find out, yet) that I find it hard to market directly to, but who I don't want to put off by looking too enterprisey, either.

Finally, I'm already quite happy with my approach to segmentation, which is having diferent editions of my product that are equal in features but vary in capacity. I feel that I can comfortably target different types of companies without having to give myself a headache about charging everybody differently.

I use free customization and extra services as negotiation mass with large customers.

answered Oct 15 '09 at 17:41
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Hanno Fietz
280 points

0

If its a commodity product please provide pricing as it will help the rest of us make a decision quicker.

However software that can require custom tailoring can be done via a contact form.

answered Oct 15 '09 at 17:42
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User161
71 points

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