If you’re running a B2B business, you must have noticed that some companies choose to have a pricing page on their website with clearly defined features in different price tiers, while others simply have a ‘contact us’ button to talk to you, understand your exact requirement, and only then offer a quote.
So why do these two starkly different approaches exist? Which one works better? What’s the reason for some…
B2B companies to not have a pricing page?
Do they forget to put it there? Of course not!
It’s so that they can charge different prices to different customers. B2B sales is all about customised offerings, customised solutions, and yes…customised pricing.
In such cases, pricing boils down to factors like the mix of products being offered, contract lengths, associated services etc. But the most important elements here are the negotiation skills of the two parties involved.
In fact, the final price is often known only to the customer and the seller, and is seldom made public.
B2B companies tend to spend substantial amount of time, money and manpower into finding out the piece of competitor price information that can be accessed. Often they gather incomplete data, formulate prices over this data, and are unable to close deals.
There’s got to be a better way!
Leading B2B companies are now adopting a much stronger method to discover the fair market price for their offerings…their own historical transaction data!
If one product has successfully been sold 10, 20, or 50 times under specific conditions (which include the presence of competitive alternatives), it’s only logical to assume that the prices at which the product sold were very close to the fair market price relative to those alternatives. It’s a direct indication that customers consider those prices to be competitive enough to make a purchase.
Also, your sales team will trust prices generated this way, because they have won in the past, with similar customers under similar situations. Dimensions like customer size, customer type, contractual conditions, geography, products offered and payment phases can be used to create micro segments of transactions and generate suggestions for the best price to offer. Meanwhile, for …
B2B companies who choose to have a pricing page
It was recently seen that 40% of the fastest growing B2B companies in the US make their pricing public. This figure may seem low, but not by historical B2B standards. (Study conducted by Mattermark and Drift)
Buyers want clarity, so go out of your way to eliminate confusion
As more companies disclose price on their website, B2B buyers come to expect it. If disclosing an exact price isn’t possible, helping your potential customers find a price range may be, and it may mean the difference between them considering your company or moving on to other options.
Pricing pages can sometimes be overwhelming make users a little uncomfortable. Here is a good analysis by Hubspot about some neat, intuitive, flexible and reassuring pricing pages.
The Bottomline is
that if you offer tiered pricing, make it clear how the product or service differs at each price point. Or, if you think it doesn’t make sense to include pricing information on your site, don’t mimic your competitors. Rather, use your own historical data to gauge which prices have worked in the past for different customer types.