Imagine if grocery stores didn’t display pricing. You’d be outraged if Kroger forced you to request a quote on bread and milk. Likewise, it would leave a bad taste in your mouth if an electrician didn’t give you an estimate for rewiring your kitchen. You’d never hire him or her to do the work. That’s because B2C consumers have an expectation for businesses to be transparent about pricing. Why should industrial manufacturers and distributors be any different?
Why Industrials Hide Pricing
As an industrial, you have many reasons for not displaying your pricing online. Valid reasons. You don’t want competitors to know your pricing. Or, your prices might scare away potential customers. Everything you make is custom or your contracts with suppliers prevent you from displaying list prices. Whatever your reason, there’s an even bigger reason why you should reconsider:
Why Industrials Should Show Pricing
According to a study from usability guru Jakob Nielsen’s Nielsen Norman Group, pricing does three things: 1) It helps buyers understand they’re in the right category (e.g., professional-grade pricing will weed out retail customers); 2) it helps customers make critical comparisons based on price-to-feature ratios; and 3) it helps customers make budget allocation decisions. Above all, it establishes trust.
Your decision to hide pricing does not entice customers to request pricing; it just encourages them to go to a competitor. Customers believe that since you’re not upfront about pricing, you’re either not trustworthy or too expensive. Why create friction at a critical moment in the buying process?
Displaying price shows you are a transparent company and helps your buyer make more informed decisions. Like a grocery store shopper, your buyers want at least a basic idea of what they should expect to pay for your products and services and whether or not they can afford them.
Pricing also gives you an opportunity to explain the positive value of what customers get for your price. For example, if you sell premium mechanical seals for industrial fluid systems, you would justify your relatively high price by explaining that your products’ reliability enables industrial plants and mills to save 15 percent on their fluid seals over time. Moreover, a plant manager will happily spend the extra $100 or so to get a more reliable seal if it reduces the risk of unanticipated downtime at $30,000 a minute.
Industrial Pricing Solutions for Manufacturers
We understand that pricing is a challenge for manufacturers. Many products they make are custom and the prices of raw materials are always fluctuating. In these situations, there are two solutions:
1. Provide Examples
Let’s say you are a custom metal fabricator that specializes in large assembles such as boiler pressure vessels and access platforms. Every project is going to have variables that affect cost so you can’t give definitive pricing. What you can do is provide examples of past projects, how long the projects took, the materials that went into each project, and the costs. This gives buyers an expectation of what they can expect and helps them find projects similar to theirs.
2. Provide Ranges
If you are a contract manufacturer of stainless steel handles, every customer gets a different price. You have to factor in run size, part complexity, raw materials, etc. In these situations, you can show common parts you manufacture — for example, an automotive handle, an appliance handle, an aesthetically challenging handle, a simple handle — and provide a range of what you typically charge for a short or large production run. You don’t have to be exact — just provide enough information so customers know what to expect.
Industrial Pricing Solutions for Distributors
Distributor pricing can get pretty complicated when you factor in regional pricing and manufacturer restrictions. Certain manufacturers absolutely refuse to allow you to publish a price online if you sell below their MSRP.
In many cases, you can come to an agreement with the supplier to allow you to display pricing after the product has been added to a customer’s cart. Suppliers may also agree to display pricing for logged-in customers who have existing user accounts. Remind suppliers that pricing is in their best interest because it helps customers make more informed decisions.
There’s No Simple Solution for Industrial Pricing
B2B shopping involves much higher stakes and higher prices than bread and milk. Your competitors shy away from pricing for the same reason — it’s risky. But that gives you the opportunity to create a competitive advantage by being the company that’s not afraid to show pricing. Pricing transparency is good customer service, a good way for customers to qualify themselves, and a good shopping experience that keeps you out of the “too expensive to show price” category.
We get that it’s easy for us to say transparent pricing is a simple, straightforward solution, but our experience working with industrial clients has confirmed that the risk is worth the rewards. We’d love for you to leave a comment about your pricing challenges or share a creative solution that has worked for you.
Or, if you still have questions about pricing and how to connect with online industrial customers, we encourage you to download our latest eBook, “Update Your Online Catalog Already!” for tips on how to optimize your online catalog or eCommerce site for lead generation and sales. Though the eBook caters to eCommerce and catalogs, there is usability information about optimizing search bars, improving product photography, and creating product attributes that can help any industrial website.