Price transparancy is better

by | Nov 20, 2019 | Pricing strategy

The added value of price transparency for you and your consumers!
Transparency, many are talking about it, few companies control it. Where does this taboo actually come from? Why do we want to keep our prices hidden, and for whom? For our consumers, or for our competitors?

Price transparency

We are of course talking about companies that strive to be as unclear as possible. Do you recognize this? You try to book a vacation and it all seems fine. You see nice prizes and you think: YES !! You click on a vacation to Tenerife for € 49,-, you come to the next page and … it costs (only) € 389,- because of administration costs, taxes, extra options you don’t want but are required etc.

Fortunately, this strategy is on its way back. Transparency is becoming a trend in our society, we want everything to be transparent; How does this work? How much does that cost? And especially: why do things go as they do, and is it fair? The consumer is becoming more and more articulate and also demands more transparency.

Not only bananas should be more fair trade, also Santa’s presents, your bike tires, the extra parts of Ikea cabinets and your trip parachuting. Everything must be honest and transparent. How sustainable are Walmart’s socks? Are the Chinese workers fairly paid for montaging your iPhone? Is the new parquet in your house FSC?

Price transparency responds well to this ‘knowledge need’. By communicating your price neatly and clearly, you avoid frustration with your customer.

Be clear

Curiosity is in our nature. Certainly in the current market it is a missed opportunity not to respond to this. The moment you do not communicate your prices clearly, chances are that the consumer has found a clear price with at your competitor’s website within 2 clicks. Many consumers see it as an obstacle if they can’t find prices or information online and are therefore more likely to look further instead of requesting a quote or contacting you.

Entrepreneurs can also benefit from price transparency. This way, you can keep a close eye on which prices your competitors offer anywhere in the world – and anticipate on it. Or perhaps, that may be precisely why many companies are not (yet) transparent.

Offering transparent prices for your consumers also generates a good deal of goodwill. Who doesn’t get frustrated when booking a vacation online? At the first moment it looks like the vacations are up for grabs, great offers and low prices, but in the booking process the monkey business quickly shows and the rates only apply to special dates or conditions and, depending on your progress, the process costs become higher. The result: a frustrated customer who could not succeed within the desired budget. The same applies, for example, to leasing companies. ‘Leasing can start from € 179 per month!*’ And in lower case: *based on 60 months, with standard equipment without air conditioning and other specifications. The further you get into the booking process, the higher the costs will be, in other words: you will be misled. And that monkey isn’t the one laughing, because the monkey doesn’t sell to frustrated customers. And yes, the monkey is you!

More, more, more information

There are more sides to price transparency, or actually transparency in general. Because consumers simply want information and clarity, it is good to give it to them. Imagine going to a car dealer. You want a car with a spacious trunk so that you can put your golf gear in, lots of seats because you have a large family, a modern interior because you like it and it has to be sporty. You did some research already and you are interested in a specific model.

If you talk to the salesman, he will tell you everything about the model that you had in mind. He asks for your wishes and considers whether the model indeed suits you. Because the salesman wants you to buy a car at his place next time also, he will do his best to make you as satisfied as possible. That is why he asks further. How many miles are you going to drive per year? Is it for business or private? He indicates how much the road tax is and how much petrol the car consumes on average. Does this fit within your budget? Do you have to be able to go off-road too?

If the salesman notices that your wishes fit better with another model, he will certainly suggest that, even if that model is cheaper. The ultimate goal is that you have the best car in the whole world, according to your experience, and to also have received a great service ‘you couldn’t get anywhere else’. Not only will you talk about your car, but also about the place where you bought it and about the salesman. You talk about the advice the salesman gave you, even though it did not profit him, and you promise to buy your next car from him also.

With your webshop, you have to be just like the salesman. Ensure that potential customers receive the information they need. Make sure they also see other options that might better suit their needs. For example, you can indicate in the product description that the product in question is not ideal in some cases, for example:

This keyboard has 54 keys and is therefore relatively small. It is very suitable for beginners, but less ideal for advanced students. For those who can play well, we recommend buying this keyboard with at least 76 keys.

A web store visitor who can indeed play well, will appreciate that you immediately offer this option. Conversely, you can do the same thing, picture a smaller keyboard on the larger keyboard page. In another article, we give many tips on how to create loyalty and make customers happy.

In short, be (price) transparent and provide information.

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