Two recent experiences highlighted common mistakes businesses make when it comes to their price. Be sure to avoid these critical errors.
I was recently flying across country. I had an opportunity to purchase Wi-Fi for my flight. I saw that there was an option to purchase a monthly subscription. Figuring that I would be making several trips that month, I opted for the monthly program for about $50 instead of the $15 flight charge. Of course, only two of the other flights that month had the service. But, I knew I was taking that risk. I still felt good about the service and the purchase.
Surprise -- the buy that keeps on buying
What was surprising was not the $50 charge on my bill, but it was the charge a month later for $50. The day I saw the charge, I visited the website. I logged in to my account, but saw no mention of a recurring subscription. I used their online chat, and the representative said, "When you signed up, it was for a recurring service. If you don't want it, you have to contact us. Otherwise, it continues." There was no way to unsubscribe via the website.
When I signed up for the service, it required an email address. They could easily (and at no expense) notify customers that they will be billed the next day unless they take action. Instead, they decided to bill customers in stealth.
Why is this stupid?
Why would you charge someone without informing them? The only possible reason is that you know they would cancel the service if they knew a charge was coming. Though this might help a company's short-term revenue, it will turn those customers into detractors who will resent the vendor and seek "revenge." Fear not, the revenge will generally not result in a violent rage. Rather, they'll just tell everyone they know how slimy you are as a company. Look out for your customer's best interest, and you'll earn their trust, loyalty, and repeat and referral business.
Keeping price a secret
A salesperson called the house and described their natural, organic food products delivered to our door. It sounded like good stuff. After some discussion, I asked the salesperson if he could share the price list so I could determine if the premium they charged for their product would be something we would be willing to pay -- I didn't want to waste either of our time. I assumed that their product would cost more than other options.
The salesperson said, "We will only discuss price in person." Their unwillingness to share any pricing information raised a red flag. Was their pricing so offensive that they could not share it? Did they not have consistent pricing? Did they not price their meats by the pound?
Share the price
We are probably their ideal demographic. Not sharing their prices made me uncomfortable, and we decided not to meet with them.
I advise clients not to share price too early (before you know what the client needs) or too late (after you have invested too much time). The old-school notion of withholding information from your potential clients just doesn't work anymore. If your price is higher than the market, explain why. If you are the low cost leader, tell me that. If you fear that clients will not meet with you if they know the costs, then you are likely wasting your time.
How do you feel about discussing price? When is the right time to discuss price?