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Why Do Our Competitors Hide Their Prices?

David King
-
December 29, 2020

As we've been writing our Surveying Software Comparison Pages, we've noticed a trend - many of our competitors don't reveal their pricing. 

If it's hard for us to compare prices, the same must be true of anyone in the market to buy.

Here are some reasons why companies choose to hide their pricing:

  • Lack of Confidence in Their Product.¬†If the company isn't confident in its product's value, they¬†may be worried that the price will scare you away.
  • To Keep Competitors in the Dark.¬†The software provider may want to hide their price from their competitors.
  • Complex Pricing.¬†The pricing may modular or too complex to explain on the companies' website.
  • Customers With Different Pricing.¬†When companies change their pricing, they often don't want older customers to know.

We've spoken to asbestos surveying companies that have experienced hidden pricing when buying software. The price variation can be mind-bending. 

One business might pay 2 or 3 times as much as the next for the same features and number of users. 

An example of "good" pricing

Companies with reasonable pricing usually increase the price with product usage.

  • User-based pricing.¬†The number of users is the gold standard - it's simple to measure and will be linked to your biggest overhead, salaries. Other metrics exist, but are infuriatingly hard to estimate (the number of reports, how many features you use, etc.). Avoid these if you can.
  • Training and customisation.¬†Good software is easy to use, has¬†self-serve training¬†and "just works". That said, it's reasonable that some buyers will want¬†formal training¬†or customise the product. Enterprise buyers have the additional burden of management change, so training de-risks their purchase.

An example of "bad" pricing

Let's look at some real examples of poor pricing.

Long Multi-Page Quotes

Long, multi-page quotes signal that the pricing is too complicated. The software provider should be able to explain their pricing in a sentence or two.

All software has moving parts, but that complexity should not creep into the pricing. Think of products like LinkedIn, Xero, Freshbooks etc., and you'll see pricing you can understand quickly.

Too Much Jargon in The Pricing

There are generally two ways to price a product:

  1. Value-Driven pricing - reflects the value that you get.
  2. Cost-Driven pricing - reflects how much the product costs to maintain.

Seeing technical jargon in the pricing indicates that the product is cost-driven rather than value-driven.

The supplier has tallied up all the work it takes to create and maintain the product, then passes that cost onto you with a margin for profit. The supplier may want to justify their pricing to you in their quote, hence the jargon.

Value-Driven pricing is simpler to understand. The value to you and the price are linked. It indicates that the supplier has a deeper understanding of your business.

Eye Watering Up-front Costs

As I mentioned earlier, a good product should "just work". 

Be wary when the quote requires you to pay up-front costs for setup, training, onboarding etc.

From a technical standpoint, this may be an indicator that the product is hard to manage. Up-front costs can hide the fact that you're buying something that needs more work to be helpful to you. Do you want to work with a product so fragile?

Choosing to pay extra for in-person training or enterprise customisation is good. However, being forced to pay is terrible.

Paying Extra for the Basics

As a rule of thumb, if most users want a feature, it should be included in the price.

We've spoken to hundreds of surveying companies about this; we believe that software companies should include most features in the base price:

  • Installing the App on your Devices
  • Access to Default Templates
  • Importing and Exporting Data
  • Hosting
  • Maintenance and Upgrades
  • Backups or Data Replication
  • Customer Portal

If your quote includes these as optional extras, you need to make some uncomfortable choices: run the risk of not having the feature? Or commit to it, just in case you need it?

Paying Extra for a "Hosted" Version

Frankly, all software should be instantly accessible without any barriers.

When a software provider suggests you have specialist hardware to "host" the product, we highly recommend that you walk away.

An optional "hosted" version is a trick; the same machine exists somewhere. You're buying hardware that is not compatible with the modern world. Physical servers are hard to maintain, and each runs different code - can you imagine how hard that is to manage? Who pays for all that complexity? You!

The hidden costs of maintaining a server can be colossal - we've spoken to companies using these archaic machines, and we only hear horror stories. The idea of paying extra for this makes my skin crawl.

Look for products where there's no mention of hosting or servers.

Conclusion

Pricing should reflect the value of the product to your business. Therefore, it should be easy to understand. Avoid complicated quotes; it's an indicator that the value of the product is not well understood.

We write our inspection software comparison pages in a balanced manner that highlights the pros and cons of our competitors.

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