One of the livelier debates among software companies is how much pricing detail should be displayed on their website or whether any pricing details should be displayed at all.
Those in favor of publishing pricing details claim visitors expect it from their website, say it helps them avoid the uncomfortable budget question, and that not posting enough detail will frustrate potential buyers and send them to another provider.
Those opposed believe they are better off forcing the prospect to inquire, which will filter out the tire kickers, prevent competitors from knowing their pricing, and give their sales team a chance to focus on value rather than price.
Should I display my prices on my website? What if I charge different clients different rates?
While it is a fun debate, determining the level of pricing detail you should publish, or whether you should publish any pricing at all, actually begins with an entirely different question. How aligned is your pricing plan to your pricing reality?
For many SaaS companies, service providers, and software companies, this alignment is off…sometimes way off. For these companies, a price list is meaningless because it is indefensible.
Publishing prices on your website, in cases such as the above, can be counterproductive, as it can erode trust with both prospects and customers. Imagine the reaction of a long-time customer who discovers they are paying more than your published prices because they were never migrated to or even informed about a new pricing model. Or the prospect who views your pricing page and knows their competitor is paying much less than what is published. How much respect will either have in your company or its prices? Not to mention the prospects who do believe your pricing page and simply dismiss you as an option based on the prices they see.
Displaying pricing detail when your pricing house is in order
If your pricing house is in order, you can be much bolder about your approach to publishing detailed pricing. Particularly if your competitors’ house is not in order. Here are a few attributes that elevate the disciplined software houses over those in disarray:
- A logical, defendable pricing model, where discounts are earned for specific customer behaviors, not subject to an individual sales rep’s or manager’s discretion.
- A packaging structure attached to meaningful value drivers (e.g., if the main difference between your ‘good’ and ‘better’ packages is one user vs. ten users, how does the customer with four users gain value by upgrading?).
- A customer roster where those who buy the same set of products and services pay the same price—known as Market Fairness.
Considerations when publishing pricing detail
Once you understand the alignment between your pricing model and its execution, your discussion about how to publish your prices can focus on other important elements:
Target customer fit
Your pricing detail should be a mechanism for prospects to recognize their fit to your solution—helping them realize if they can’t afford it, for example. One way to accomplish this is to illustrate the price in sample configurations that match your ideal customer use cases. This can give the prospect a feel for what their costs would be, making it easy for them to gauge their fit. But limit your samples to three; more than that and the prospect may try to lock in too much to one of the sample configurations.
Level of specificity
If your model includes multiple variables that affect the customer’s price, like profit/non-profit, U.S./non-U.S., length of term, upfront payment, etc., you will want to communicate those variables in a way that helps the customer understand how the pricing applies to them, without exposing so much detail that they are confused or frustrated. Or that competitors can get an unwelcome look under your pricing hood.
Impact on the sales process
Be aware that publishing detailed pricing may have an effect on your sales process. If you have typically introduced pricing toward the end of the sales cycle—say after the buying team has demoed and short-listed your solution—then publishing prices in any form could have implications for your selling process. These potential effects should be vetted with your sales team and pilot-tested before rolling out.
Determining whether displaying pricing on your website is right for your software company
The decision on whether and how to publish your pricing is like the stoplight at the intersection of pricing and sales. If you don’t manage it effectively, you can either stop traffic or create chaos. But if you do, then things can flow smoothly and you and your customers can keep moving down the road.