Publicly Available Pricing: Theory and Practice

A lot of what I write on this blog has to do with the changes that have happened as a result of buyers’ increasing access to information. Often, these changes are looked at from a general perspective. Today, I want to look a very specific example of how this overall market transition affected us at Eloqua. It’s a very representative, specific, example of what’s going on in the market in general.

Last week we made the pricing for Eloqua’s software product packages public on our website for the first time:

The starting prices range from $1450 to $10,000 per month, depending on the level selected.

Just hearing this likely makes everyone who has ever been a field sales rep cringe. Won’t this blow up deals? What if an Enterprise buyer hears of an SMB buyer making a purchase at 1/10th the price? Won’t you be excluded from deals based on the price being seen as too high (or too low)?

Unfortunately, these arguments are based on an incorrect assumption that without talking to our sales team, buyers will not have the ability to form these perceptions of our price. That assumption, however, is false. Now, buyers are able to gather information, form opinions, and come to conclusions without ever talking to a salesperson. The sales team is competing with Google as a source for information, and that is not an easy battle to win.

So, with the market transmitting information very efficiently, the question for us was not whether the market should have access to opinions on our pricing – they already had formed opinions. The question was whether those perceptions could be better guided by contributing accurate information to the conversation.

In our case, the breadth of organizations we served had led to a perception in the SMB market that we were significantly more expensive than we actually were. So, we were better off to correct that data point in the market, rather than allow mis-perceptions to be the guiding data point, as that could easily lead to not being considered in a deal at all if the perception was significantly different than reality.

As with any change of this type, agreeing on the theory of what is happening in the market is much easier than the tactical implementation of the changes that are needed. There was much debate internally, and many points of view were raised. However, the feedback has been overwhelmingly positive, and even in the short time it has been public a number of conversations have started with buyers who had held misperceptions of price.

Are there any changes like this that your organization is considering that are easier to agree to in theory than in practice? Will you move forward with them?