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Should you Reveal your Pricing?

Written by: Jacqueline Drew

Article Overview: Many businesses are afraid of the competition finding out their pricing, and keep rates hidden. The problem is, they waste a lot of time preparing quotations for customers that just aren't serious buyers, who merely need to budget. Here's an expert opinion on why giving out a little information on pricing may be a good thing.

Should you Reveal your Pricing?

Should you Reveal your Pricing?
By Jacqueline Drew, B.Comm
President, START Marketing Inc.
www.startmarketing.com

Have you ever walked into a high end store where there were no price tags on anything, and then gotten the distinct feeling that “if you have to ask the price, you just can’t afford it?” We all know that this kind of secrecy surrounding prices makes people feel nervous. Most will leave rather than be embarrassed by having to ask the price and then admit it’s out of their price range.

But there are many businesses who still take that approach. And most of them are service businesses doing custom tailored work. Like, What does it cost to get a trade show display designed? How about chartering a private plane? How about enlisting the services of an advertising agency? For the most part, you’re left in the dark.. But if you own such a business, here are a few reasons why you might reconsider your pricing secrecy strategy:

1. First, if there is no information on the costs, people will assume it’s a lot more expensive than it is. So, then they put it off altogether. Did you know that for many destinations, it’s cheaper to charter a small private aircraft for a group of four people for less money than it costs to buy four commercial tickets? But if you can’t easily find out the costs of chartering, then people will continue to assume it’s only for rich businesspeople!
2. If there’s no indication of fees, people will never be able to plan to the costs. Typically businesses budget for things well in advance of actually buying them. So even if the price you post is expensive, at least they can plan for it.
3. By posting an indication of your fees, people will get the impression that you are unafraid of your competition. And why should you be afraid? If you are the market leader, posting your pricing is more likely to convince your small competitors to raise their prices, not lower them. And if the competition doesn’t post its rates, people will likely assume they’re most expensive.
4. Finally, by posting at least “budget figures” for potential clients, you can weed out your workload of preparing custom quotations for clients. The prospects who do call you will then only be the ones who have already mentally prepared themselves for the costs. And the quotations you prepare will be very well qualified.

The upshot is, if you at least give people approximate budget pricing they can work with, they will be much more comfortable calling you for service.

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Related Forum Posts
Re: need pricing help please - [quote="lovesangel":32mmx3yi]Where would courses fall into this pricing mix? Either/and online, downloadable, or the hardcopy kind you can order and hold in your hands?[/quote:32mmx3yi] Nancy, could you define "courses" with as much detail as you can? I ask because every person reading this post has a different "picture" in their minds of what a "course" is. For me a "Course" can fit in any of the delivery methods I disclosed in the Pricing Ladder. That is.. it can be an ebook, autoresponder sequence, teleseminar or webinar (recorded or live over the phone/internet), a workshop (live-in-person-face-to-face) or a one-on-one session. So let us know how you are defining "courses". thanks
Happy Worker as of Dec 31 2007 - Here's mine... I'm now off to make an offering to the business planning gods for their help in getting to these goals & beyond. To the combined success of Prophets 2 Profits! ----------------------------------------- 1) Corporate a) Retail - Sales reps covering all major markets (1M or more) - Retail product launch plan - 1 more retail release (TBD) b) The Toy Agency - Systems for: o Creative process o Pricing o Manufacturing o Logistics - Marketing agency strategy in place - 1 new customer every 2nd month (5 new customers); 1 of which will be rev of >= 500K/year c) Business - Creative talent pool management strategy & process - Outsourced and/or weekly bookkeeping - Monthly budgeting & forecasting - Better banking organization (Line of Credit, CCs, automate billing for appropriate vendors) - Team total of 5 - Larger office d) Web site - Daily updates - Start of separation of Blog/TTA/Retail 2) Personal - Most weekends “off”! - Entirely separate personal finances; basic personal financing plan - Family….?
Pitch Like A Girl: How a Woman Can Be Herself and Still Succ - Pitch Like A Girl: How a Woman Can Be Herself and Still Succeed Ronna Lichtenberg 2005 From the inside cover: "As a woman, you probably feel uncomfortable when it comes to promoting yourself and asking for what you want." WHAT IN THE HECK IS THIS, I asked myself when I read that. Women are the fastest growing business owners in the US and Canada, there are t housands of women executives and CEOs - though not as many as might be expected, admittedly, yet the book opens with this surely out of date stereotype. However, as she continued to give examples of women who had high paying jobs but were routinely not paid as much as men because it hadn't occurred to them to ask for raises, etc., I decided it was probably true for a majority of businesswomen... Anyway, more of the info from the jacket: "Other books have told you how to get what you want by being more like a guy. Pitch Like A Girl tells you why its an advantage to be who you are and how to do better by bringing more of yourself to work." The TOC: 1. Pink and Blue 2. The Quck-dry Chapter 3. What's In your head that's not in his 4. The Me, Inc Mindset 5. Visioning: Discover What You Really Want 6. Identifying Prospects 7. Pre-pitch homework and heartwork 8. Crafting the pitch 9. Pricing the pitch 10. Packaging the pitch 11. Delivering the pitch 12. Closing Conclusion A Word to the guys The Empathy Quotient The Systemizing Quotient Bibliography And on a side note - non-fiction books without indexes - of which this is one, annoy me.
Why women don't charge more - I just read a chapter in Pitch Like A Girl: How a Woman Can Be Herself and Still Succeed, by Ronna Lichtenberg that deals with this. THe chapter is called Pricing the Pitch. "In a WAll Street Journal article about what might be holding women back from corporate success, Terry Dal, a former vice president at Wells Fargo bank, said, "Good girls don't advertise; only prostitutes advertise. We feel dirty promoting ourselves." The author's advice: The first step in getting the money you desserve is to understand the market rate for your offering. Not what you think you need, not what they're willing to pay, but the going rate for similar goods and services offered in your area by someone with your skills and experience. Then, seek expert advice. "Men routinely consult lawyers, financial advisers, exxecutive recruiters and any other paid counselors to help them assess what constitutes a fair fee." Your research into going rates should not lead you to a single price for your pitch but rather a range of prices - both a market range and a personal range, which should overlap but won't necessarily be identical. In pricing, one size does not fit all. The final step in determining your price is to consider what you think you'd be paid for the same job if you were a man. The author also discusses why women usually discount their prices (must'n't appear too over-confident), the difference between discounting and "giving a discount", and other issues. I'd advise every woman wondering about what to charge to read at least this chapter of the book.


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