Opinion: Show prices if you want to grow your online business
As a former online business co-owner, my partners and I always had the controversy of whether or not to be transparent about our prices online. Most of the time, we would choose to be non-transparent mainly because we wanted our prices to stay anonymous to our competitors and also have an opportunity to engage in 'intimate' bargaining conversations with our customers. A rapport would be created if our customers were on board, thus considering them retained for the long run.
However, as this trend of price non-transparency spirals among many online businesses in Uganda, should this business marketing model be considered as a fundamental error considering the increasing number of customer grievances? In a poll post I recently made on Instagram, the public was asked if online retailers should reveal their prices rather than telling potential customers to "please inbox for price.” 94% of the respondents said Yes from a customer’s perspective, while the 6% that said No were business owners. Price discrimination and time wastage were the major challenges the customer respondents highlighted. One business owner stated that being non-transparent allows her to negotiate with her customers.
In such a competitive online free-market with big players like Jumia, Kikuu and Bazebo that are price transparent and offer customer incentives, every customer matters to your online business if you want to remain a market player. Without the right information customers need to purchase, they will be very quick to walk away from your products right to your competitors’ however convincing yours are. Other customers might even grow suspicious if the information required to purchase is hidden from view.
Here is why price transparency is fundamental for your online business;
- Time-saving
Imagine running an online business with high social media engagement rates and your comment section and inboxes on every platform are full of that one annoying question; How much? What a waste of time to reply to every person privately in their inboxes, yet you are not even sure if they will make a purchase! With price transparency, you will only deal with customers that are willing to buy, regardless of the price because they know your products' worth and value. Small businesses should not waste time trying to lure customers with price negotiations and endless bargains, instead, they should focus on their customer retention strategies for their loyal customers such as loyalty programs, product personalization and excellent customer service. Once your customers are satisfied, recommendations for your brand and products are inevitable which in the long run puts your business at a competitive advantage.
- Your value and brand image are emphasized
For customers to be loyal to your product and brand, your values must emphasize transparency, honesty and non-discrimination, by not judging customers based on what you think they can afford. With price transparency, your product will be defined and quantified based on its value and worth by customers from all walks of life. Listing your prices makes your business even more attractive than any competitors’! Besides, there are several ways you can offset the fear of customers for not approaching your businesses if your prices are considered to be above the average. You can co-currently market your special offers like after-sale services such as free delivery for customers in certain vicinities, discount coupons for their next purchase, return/replacement policy or even free user training on the product if needed. Customers will always pay for this kind of value!
- Weeds out unqualified leads
When you are non-transparent as a business, there are many unqualified leads you will get asking the same "how much" question the qualifying ones are asking. You will invest time, energy and resources in a relationship only for it to be unfruitful because someone valued price over the quality of your product. With transparency, you will gain customer confidence and only deal with your loyal ones that value the quality of what you are offering.
In this new era of online shopping where customers can easily compare prices and find the best deal as conveniently as just having only one tab, transparency, in general, is a magical key to the success of any business. If you can save customers and yourself the time of having to have unfruitful conversations about the prices, this time could be redirected to understanding tailored customer needs which are priceless!
