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I'm working on a cloud based B2B software and top management is insisting we don't show the prices on our public site. I can't understand the reasoning behind this. How will this affect the customers - are they more likely to sign up if they see prices up front or is this irrelevant?

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up vote 7 down vote accepted

This is a strategy usually followed by companies that follow price discrimination as a strategy. This could be because:

  1. The cost of providing that product actually depends (usually statistically) on who is asking for it. Think of insurance companies here, where a healthy 18 year old with no history of medical problems is likely to cost a lot less to insure than a chain smoking 70 year old who has had 3 bypass surgeries.

  2. You simply have a high markup and can afford to give different prices to each user as a way of trying to maximise your profit. If you're charging different prices to different people, you don't want to announce publicly what the prices are - or you will end up with some unhappy customers.

Overall, on websites, I have seen little evidence that price discrimination reason 2 is effective. However companies who do this tend to keep any data secret, so I can't comment definitively on it's effectiveness.

I can however say that it provides a poor UX regardless of whether it helps achieve business goals.

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I agree it provides poor UX and the only argument is that the competitors can see the prices up front and if we hide the prices, they'll need to sign up :( –  mijata Apr 18 '13 at 13:10
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@mijata: As a customer, I have two rules I use to estimate pricing. 1. If you require a phone call to get pricing on higher volumes, I assume the price will be lower (else I would just accept the lower tier's pricing and not call you). 2. If you refuse to post prices at all, you are more expensive than any competitors who do post prices. –  Brian Apr 18 '13 at 17:10
    
@Brian My sentiments exactly. –  mijata Apr 23 '13 at 18:32
    
@Brian & JohnGB: would you buy products from a department store that had no price label on things, and just expected you to slap down your plastic for whatever number came up at the till? Such places often have an abundance of "concierges" milling around trying to get some commission from your custom. –  Nicholas Jul 25 '13 at 7:37
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@Nicholas you are comparing B2C with B2B in your comment. B2B practices are significantly different from shopping in a department store. –  JohnGB Jul 25 '13 at 13:10
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Well from a true User Experience point of view, no, it's not a good idea. If the user is interested in a product then they want to know how much it is in order to make a decision about purchasing it or not.

However, from having done B2B websites in the past this issue often crops up. There are a variety of reasons for not showing prices though.

  1. Different customers would pay different rates, so there is no 'one price' per item, it depends on the account the customer holds with the you.

  2. Prices may vary depending on how many are ordered (so for 0-50 items they come in at £50.00 per item, but for 50-200 items the cost is £40.00 per item).

  3. None of the competitors show prices so you don't want to be at a disadvantage by showing that your products are expensive, you'd rather get the prospective client on the phone before the find the prices so the sales person can work their magic to get them on board.

  4. There might not actually be a price for the item, it could depend on how many sales the department have made that month as to how much they'll charge for the items.

The list could go on.

Such decisions aren't really made because of user experience, they're made because of business decisions. What explicitly is the business requirement for not showing prices? What do the competitors do? Take all those requirements into account and that should help you make a case one way or another.

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This is definitely a business decision. However, the app has clearly defined price plans based on the number of users and no other differentiating features. Most competitors do have prices listed on their sites. –  mijata Apr 18 '13 at 13:20
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That all depends on your pricing strategy.
For example Boeing does this because their pricing is extremely flexible, based on number of orders placed, additional services contracted with the order, options and exact product configuration, etc. etc.. It's just not feasible for them to list even approximate prices, and their intended customer know and expect that.
For example if you order one 737 jetliner with standard seats, no training or maintenance support, and are a first time customer, you still have different options (engines, avionics suite, the list goes on) but will pay a higher price than if you buy 100 aircraft with, add a maintenance contract, training for your ground crew, and are a repeat customer (or there's major competitors to underbid for the contract).
If you're Adobe and offer an off the shelf package of products with no customer specific modifications available, it's much more feasible (and customary) to show list prices for various package options and volume discounts, but even then the actual unit price will depend (at least for large orders) on contract negotiations between the companies involved.
Ergo, it all depends on your portfolio, your company policies, and your target industry.

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