What is your website pricing strategy, do you show your pricing, or do you hide it?
It’s widely known that showing your prices to your leads can result in a higher conversion rate. However, it’s also been thought to trigger price sensitivity and scare away potential buyers. So, what’s the answer?
This guide aims to address those concerns and give you a definitive answer as to whether or not you should show your prices on your website to increase sales and conversions.
Deciding On The Best Website Pricing Strategy
Should you display prices on your website?
Yes, whether you want to set up an online store or simply put out your product to the world, you should show pricing on your website. By displaying prices, you are providing valuable information to leads, and helping to move them further down the sales funnel.
To quote from the Price Intelligently article on the importance of pricing: “Pricing is the reflection of everything you do as a business, from your product development all the way down to a link to your website, because we live in a world driven by value. Nothing else defines a business and a product more.”
Why should you show pricing on your website?
It is a legal requirement – If you are not experienced with how to sell a product online, you will be surprised to learn that not showing your prices is a legal offense in some countries. For example, companies are legally required to include the prices for their products -yes, even on their websites – in Australia, the EU, and some states in the USA.
It can help you to improve conversion rates – Pricing can be leveraged to greatly increase sales by offering discounts or enticing your leads with a limited-time price
It pays to know how to price online products and services, 90% of consumers use coupons and a whopping 93% of U.S. shoppers cite discounts and offers as important factors when deciding whether or not to purchase from a retailer or brand.
It provides valuable information to leads – Early on, potential clients want to do research and compare different products before making a decision about what to buy. By displaying prices on your website, you are providing valuable information to leads, and helping to move them further down the sales funnel.
It indicates what type of brand you are – Are your products and services priced at a premium compared to your competition? If so, customers may perceive your brand as a luxury brand or in a top tier within your industry. While high pricing usually comes with high-profit margins, it also thins your target audience to those who can afford such high prices and those customers typically come with lofty expectations as well. On the other hand, pricing on the low end of the market could highlight your brand as affordable and become the “no-frills” option of the industry. Pricing often dictates our perceptions of quality and can unconsciously set expectations.
Exceptions to showing prices on your website,
However, it’s not ALWAYS a good website pricing strategy to display prices. Depending on what your marketing goal is or what type of business you have, you are going to find situations when not displaying prices or not adding any focus to them, is the best choice. Some of these situations include:
You sell luxury goods – Luxury goods are bought on status and quality, not primarily on price. Luxury brands sometimes hide their prices, only to reveal them to genuinely interested (and qualified) buyers. An example of this can be found on the Rolex website.
Your main goal is not to sell– If your marketing goal is to drive traffic to your website rather than convert it, you may want to consider having a catchy headline or a lead magnet (like a free ebook) to get people to sign up for your email list rather than display pricing of your end product or service.
You sell services – Some service providers, for example, accountants and lawyers opt not to display their prices and adopt a website pricing strategy of generating quotes for their clients. They do this whenever pricing is perceived as a barrier to entry or because there is a large amount of variance within the price. An example of this can be found on the website of the accounting firm Delloite.
You cater to businesses – Business customers tend to have more buying power and are often more concerned about the quality, reliability, and return on investment than the price of your product. B2B businesses tend to adopt a quote-driven pricing strategy, just like service providers.
You sell custom made-to-order items – Custom items, such as tailored suits or wedding decorations, often require a process of negotiations between the buyer and the seller. They also tend to include custom specs, materials, or demands that aren’t accounted for in an off-the-shelf catalog.
Need Help Designing Your Website?
Poorly designed pricing pages can leave visitors feeling angry, frustrated, or confused. Most visitors only stay on a website for 10-20 seconds, so it is vital to make sure that your pricing page is actionable and easy to understand while not leaving money on the table for your business.
If you’re not sure about how to design or how to price your online services effectively, then working with a web design company like Opasite is a fantastic option.
Opasite provides your business with a beautiful website, superb SEO, and hands-off website maintenance and management (so you don’t have to lift a finger). We can have your complete website up and running in just 7 days, and our team of talented designers and content writers will take care of everything for you!
Plus, we offer discounts on add-on services like social media management, logo design, and business listing management. No more having to deal with different companies for your website, SEO, and other business needs. Opasite handles it all!
To find out more, check out our prices (spoiler: they’re the most affordable in the industry) or contact us to start speaking with your dedicated website designer!
Some Frequently Asked Questions About Pricing
Am I legally required to show prices for my products on my website?
This depends on the country you are in and if users can purchase directly on your website (e.g: E-Commerce). In the U.S., for example, there is no federal requirement to show prices on most websites, but in certain states (such as California) it is a legal requirement.*
What are the benefits of showing prices?
You want to give buyers the opportunity to find the perfect product for them and to compare different products. Displaying prices will provide valuable information to potential buyers in their buying journey and is shown to increase conversion rates.
Do I need to show prices if my business sells Services?
There are many service businesses that choose not to display their prices for a variety of reasons. Some of these include:
- The services are customized and they do not want to offer a fixed price and instead offer custom quotes. (read the next section to learn more)
- They want to avoid driving away customers by displaying high prices.
If I provide custom quotes, should I show prices on my website?
What is important here is that you consider your target audience and their search behavior to decide how to price your products. Most luxury/custom product and service providers (which often work with custom quotes) choose to avoid focusing on price and instead focus on other benefits of their product or service.
If your industry is prone to offer custom quotes due to the variability in the services offered, then it’s probably a good idea to leave prices off the site and encourage users to provide some information prior to getting a quote. If however, you want to productize your service and offer standardized packages and price points, it’s a good idea to display those prices and let users directly compare their package options.
Should shipping be included in my product prices or a separate fee?
It is always recommended to have your shipping costs included in your product prices. Separate shipping charges have been shown to discourage shoppers and lead to higher abandonment. Often times buyers go for a product with free shipping rather than a product with a shipping fee, even if they ultimately total the same amount.
What is the best way to price online services?
When it comes to services, custom quotes are the industry standard. Oftentimes, the service provided to meet the customer’s needs might vary from job to job. It’s best to gather some information about the client, their expectations, and what services they’ll need before providing a price.
If you feel you want to display a price to qualify your leads, you can use a “Starting at $XXX” price, which may help weed out any low willingness-to-pay prospects.
What are common methods to price online products?
The Business Development Bank of Canada recommends four pricing methods when deciding on the price of your product:
- Cost-plus pricing: This pricing model involves adding your cost to the desired profit margin to arrive at a price.
- Value-based pricing: This pricing model is based on the value you provide to your customers. Read the Harvard Business Review guide to learn more.
- Penetration pricing: This involves setting a lower price to attract new customers.
- Price skimming: This pricing model involves setting a higher price to maximize revenue from early adopters.
- Competitive Pricing: This one is a no-brainer, but it is worth noting that your pricing strategy should be based on your competitors’ pricing strategy.
Should I factor payment processing fees or credit card fees into my prices?
Yes, you should. Card payment processing fees can vary depending on your payment processor, but they’ll typically run you between 1-3% of the purchase price. It’s a good idea to build this fee into your pricing (not as a separate fee though, similar to shipping costs) so that you can recoup the costs of customers using credit cards.
*This is not legal advice. Opasite LLC does not provide legal advice. Authors, employees, or any persons affiliated with Opasite LLC assume no risk of any decisions or actions based upon any information within this article. Proceed at your own risk.
