Community Economic Development Fund

Can you really withhold price information?

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The internet age has disrupted so much about pricing of products and services. In decades past, price was so much more opaque and subject to negotiation like in a medieval bazaar. If as a buyer you couldn't fully understand the features, benefits and scarcity, you tended to be more willing to patiently engage with the seller to seek this information. What you got was usually served with big helpings of persuasion.

 

The buyer-seller game has changed both for B2C and B2B transactions. Now, most of us check the price of an item on Amazon before making a decision about whether a store purchase (at a potentially higher price) makes sense for our priorities. Many B2B transactions are carried out online with no human sales intervention so pricing has to be plainly displayed.

 

All this has conditioned buyers in B2B environments to expect transactions to work more like they do in the consumer world. I wonder if it is really possible to withhold pricing information without risking losing a significant chunk of the top of the prospecting funnel? Then again the whole idea of the sales funnel is in disruption as more and more buyers show up at their suppliers doors having already researched the product or service of interest with the help of the internet.

 

So this leads me to question the practicality of the advice of Geoffery James in his Inc Magazine article: The Single Most Essential Rule About Pricing. And that is "Never quote a price before the customer fully understands the benefit of buying." While I agree that his advice represents excellent classic sales technique, I just question whether contemporary buyers have the patience to cooperate. Of course much depends on the nature of the product or service and how much information is publicly available for close analogs. A good salesperson should react to this circumstance and the level of research a prospect has conducted. So if you think you can pitch before meting out too much price information, please give it a try.

 

-- Frederick Welk
CEDF Business Advisor



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