Want More Conversions? Fix Your Pricing Page First

So you know your solution solves a real problem. However, too few prospects are converting. More likely than not, your pricing page is broken. The purchase part of the journey is getting too complex: usage-based, seats, tiers, types of users, add-ons and many other things to consider. On top, it’s becoming practically impossible to do a proper comparison between plans. This state of affairs is alarming and is becoming unsustainable. Many like to think that they can sidestep this problem by simply having a ‘Contact Us’ button on their pricing page. Reality is you’re missing out on many prospects.

If they have taken the step to check your pricing, it means they already invested time in understanding your solution. They got their wallet out – ready to buy – but they need to decide which plan to pick. The path of least friction, in terms of budget and understanding, is picking the free tier, if you offer one. But in most cases the free tier is just postponing the challenge for your prospects: selecting the right plan at the right price.

Here’s the question I like to ask software leaders: what type of restaurant is your business? Most software companies present themselves by default as a McDonald’s: an elaborate menu that requires serious time and attention to make an informed decision. This might work if they’re returning customers and the menu rarely changes. But what if they’re new to McDonald’s? There’s just too much information to decide fast enough, causing frustration and fatigue.

But your business isn’t like a McDonald’s at all. Your customers are making a very different type of decision when they consider you. You’re not selling a service that will be consumed in a single sitting; you’re selling a commitment. This requires a different approach: guidance. You want your business to be like a Michelin star restaurant. The moment a customer steps into the door they receive your sole focus.

This means that not only is the food going to be great – the service is going to be topnotch. Michelin star restaurants don’t wait to provide quality service until an order is made. Your prospects are willing to pay a lot more for a great product if it is preceded by great service. Specifically, understanding their needs within the context of your menu of offers. Any Michelin star restaurant knows this. Now, imagine entering a restaurant with food that deserves a Michelin star but you are received as if you’re entering a McDonald’s. Sounds strange, right? But that’s actually how most software companies present themselves.

I’m convinced that we will look back at this period as us lacking the empathy to provide our prospects with guidance. The same way it’s obvious today for high-end restaurants to serve and guide customers, I’m confident that this approach is bound to be adopted in the world of software. Yes, there will be software companies that do not need to provide any hand holding. If you just have a free and a paid plan, you probably don’t need to offer any guidance.  But if you’re offering 3 or more tiers and have any other variable that impacts your price point, you need to consider upping your game.

There is a clear trend to offer more options to increase the likelihood that prospects will find a fitting plan. But increasing the number of possibilities will always come at the expense of simplicity, which means more friction and at the end of the day the loss of business and growth. Unless you invest in guiding your prospects and customers in making the right purchase decision. This is why I predict that the next generation of companies that will have a competitive advantage will do so by making sure that every single prospect is guided step-by-step when pricing becomes a consideration. Even if prospects don’t decide to buy, going through a guided journey to determine the right plan and add-ons provides much reassurance and confidence in how pricing was determined. These prospects are much more likely to return and your buyers are much more likely to stick around.

Anouar El Haji, PhD is Founder & CEO at Veylinx, a behavioral research agency supporting Fortune 500 companies with pricing. Anouar holds a PhD degree in Marketing and two master's degrees all from the University of Amsterdam. His research and articles have been published in scientific journals, policy publications and newspapers.