A business owner at a networking meeting yesterday asked me the question “Should my website show prices?” And it’s a great question because trawling through the websites of businesses offering professional services (I was chatting to a life coach) it’s clear there’s a mix of approaches. Some don’t show any prices while others have opted for detailed fully-priced menus of their services.
So what are the advantages and disadvantages of advertising your prices online?
It all depends on what your website is for, and what kind of relationship you want to build with potential customers when they visit it.
Let’s begin with a statement of the obvious: if you want people to buy direct from your website you need to be upfront and crystal clear about your prices. And that works really well when customers know exactly what they want to buy and value the convenience of doing it online. So that’s products like printer ink, breakfast cereals, books and cinema tickets.
The e-commerce model can also work for customised products. That could be low value items like diaries – every year I buy one with the layout I want from Toad diaries. Or a company like Dell or Apple that allows you to build the spec of your new computer before you buy.
And if you can turn intangible services into a product you can sell them online. Traditionally that was books and then cassette tapes, and now online training courses.
What all these have in common is the sale doesn’t depend on building a relationship with the customer. I expect to be treated fairly and consistently by Cineworld but I don’t believe for a moment that anyone there has the faintest idea who I am.
People buy from people
At the other end of the spectrum are products and services that are best sold face to face. Typically that’s because it takes time to understand a customer’s needs, to demonstrate the value of what you offer, and to establish the credibility of your business. And your website is there to represent your business; it’s a living brochure designed to help start a conversation that leads to a business relationship.
Maybe your ideal customer is looking for a piece of statement furniture designed and built for a specific place in their home. Or perhaps a consulting package designed to help them identify and implement a pricing strategy to maximise the profits of their specific business. Either way, a visitor to your website won’t become a customer until they trust you to deliver them benefits that they value more highly than the price you charge them.
So here’s what happens when you put prices on your website
- You focus attention on price rather than value. Our brains take in a single number very quickly, but information about the benefits and value you offer will be processed much more slowly.
- You invite comparisons with competitors. Maybe you provide tons more value than your competitor but if a visitor to your website can’t see the difference they’ll base their buying decision on price.
- You risk attracting the most price sensitive customers who are likely to be the least loyal. Compare the lifetime value of a customer who pays £1,500 and stays with you for 6 years with one who only pays you £1,000 and leaves after just 3 years.
- Worse still, you risk frightening away your ideal customers. While some potential customers instantly decide you’re too expensive others will think you are cheap and conclude you can’t be very good. Don’t forget, one of the most successful advertising campaigns of all time was Stella Artois’ slogan ‘Reassuringly Expensive.’
- You create a psychological anchor. Once you’ve given a price it will be used as a comparison point for everything else you say later on. That’s why up-selling becomes much more difficult and statements like ‘prices start at £750‘ don’t work at all.
- You lose the opportunity for first-degree price discrimination. Ask me and I’ll tell you all about the Price Discrimination Triad and how to use it in your business.
Should your website show prices?
It all depends what your website is there to achieve. I’ve talked about e-commerce sites and ones designed for stuff that’s best sold face to face. But sometimes you might want to combine the two approaches. You could sell low ticket or pre-packaged products online and have brochure pages for the bespoke services.
There’s a real art (and quite a lot of science) to the how, when and where of presenting prices.
You can find out more about our Power Pricing training programme here.