I was reading a post from a few months back at Firepole Marketing about challenging conventional wisdom with pricing in your business. In a nutshell the idea is that you should list your prices publicly, even on your website. (For service industries, not retail.) I was drawn in.
The traditional rule of thumb is that you never do this, as it encourages people to comparison shop and potentially go with a cheaper competitor. A popular sales tactic is to pitch your product and wait until you have them on the hook, once they have to have it, to give the price.
The article’s author, Sophie Lizard, points out that this can create high pressure sales situations where they’re afraid to ask for the price and you’re afraid to volunteer it. The old approach of asking them how much they can spend and quoting around that numbers is, well, old. Instead, if you’re upfront about the price (or they’ve already seen it on your website) they are theoretically already okay with what you’re charging if they are sitting down to meet with you.
This saves time, as you meet with far less people with no budget hoping for free advice or to get something for nothing.
It struck me suddenly in considering this. Popular marketing wisdom holds that you identify the characteristics of your ideal customer and seek them out, spending less time pursuing those who are not your target. Business coaches say that you should avoid attracting coupon customers or those that only buy when it’s the lowest price, as there is no customer loyalty. With this in mind, it seems to render the concern about people viewing your online prices and going to a cheaper competitor less of a detriment. Did you really want that client anyway?
If we say that ideally a customer does business with you because they know you, like you, and trust you (that they see why you’re different) and not because you’re cheapest, they would still do business with you even if the other guy up the road is a few bucks cheaper. Aren’t you potentially saving yourself some time by weeding them out before you even meet with them? Sure, if times are tight you may take any business you can get, but a solid growth model does not include bending your prices for customers that are not really your target.