To get a good idea of how quickly perspective can change, just consider how you feel when waiting to cross a street. You get annoyed when cars fly by, yet when you’re the one behind the wheel, you, too, might floor it and zoom past pedestrians.
Hypocritical, right? Well, it’s a trap we all fall victim to, especially in the business world. For instance, take price transparency, which customers crave. When you’re in purchase mode, you probably do, too, but as an executive or leader, the idea of being open about the cost of goods and services leads to an internal dilemma.
As I speak to businesses and organizations around the world, I see it all the time. Not including e-commerce entities, most companies never post pricing and costs on their websites, usually for one of three reasons:
First, they say “our prices vary,” which may be true, but that is exactly why the question merits being addressed. What drives the costs up? What keeps cost down? Why is there so much variation in the marketplace? If your company can’t answer those questions, let alone how much your services actually cost, customers may go to a competitor that can.
Finally, some leaders think being too open will scare off potential customers. But, in reality, what actually gives buyers pause is NOT knowing the price. In fact, 73 percent of people would gladly give their money to an honest company, even if the price were higher.
Price Shouldn’t Be A Sensitive Subject
When I was in sales and running my pool business, I was one of those guys who didn’t like talking price. Customers would always hit me with the same basic question: “I’m not going to hold you to it, but could you give me a feel for how much a pool like this will cost?”
That inquiry bothered me for a long time because I wanted to talk about products, benefits, and features, not pricing. Looking back, feeling that way was shortsighted because I’d have asked the same question if the roles were reversed. Customers weren’t asking just about price; they wanted to know whether I could be trusted, and I lost plenty of sales because I didn’t make the connection. Furthermore, these good people simply wanted to know whether they could afford a pool at all, much less set a realistic budget.
So I wrote an article laying out our pricing for fiberglass pools, a piece that has been read more than 1 million times and has accounted for $3.5 million in trackable revenue. More than that, the article allowed us to still talk about features, products, and benefits in the context of the marketplace.
It allowed us to explain what drove the prices up for some companies and reduced them for others and to educate customers on what to look for in a quality product instead of just slapping a price tag on products and expecting people to buy them. And that approach doesn’t just apply to B2C companies: Educating other companies on the services you offer educates and calms them in the same way it does for consumers.
Not disclosing information customers want to know will destroy opportunities to foster loyalty. Think about visiting a product’s site and not being able to find pricing information. You don’t think, “I’m just going to dig a little deeper,” but rather, “This company clearly doesn’t have my best interests at heart.”
Transparency Puts Customers At Ease
The used car industry inspires a wide range of emotions and descriptions for those who are or have been in the market for an automobile. Some call it sleazy, salesy, high-pressured or a few other choice words that I won’t repeat.
CarMax wanted to rehabilitate that reputation by giving car shoppers a clear glimpse into every single step of the used-car-buying journey. The first step? Clearing up any pricing qualms shoppers might have.
See, one of the chief pain points car shoppers had was haggling with salespeople about price ranges. Instead of going back and forth with a salesperson and working within a price range, CarMax’s idea was simple. If, for instance, a car is listed at $30,000, a customer can’t come in with $29,999 and expect to close the deal; they have to come up with that extra dollar in order to take the car home.
While some think this option might increase the pressure car shoppers feel to close a deal, it turns out the opposite is true. Customers see the listed price and know there’s only one number – instead of many – that customer and salesperson must agree upon to get a deal done.
Buying a used car breeds natural skepticism and puts customers on edge. By making price, one of the more flexible parts of the process, a known quantity, CarMax lifted that veil of secrecy and put its customers at ease. Simply put, price transparency can put companies that practice it at a competitive advantage and lift a big weight from the customer psyche.
And that’s the feeling you want your brand to inspire in potential customers. Price can make or break a sale and play a big part in informing customer journey, so don’t hide it and allow customers to think you’re trying to put something over on them.