The Paradox of Hiding Your Price – Your Software is More Expensive

We recently made some modifications to our website.  Not only had we outgrown our first website but we also landed the domain name that we wanted when we started the company—Newton Software.

A light bulb went off during this process—whenever we go to a website, whether we are buying a bike tire or software, we all always want to know how much things cost. We’re pretty sure that you agree with the statement, “Just show us the price!” We hate it when people don’t tell us the price. Why were we doing the same?

The Art of Pricing: According to Dilbert

So to avoid the all too common example told by this Dilbert cartoon, we have published pricing on our website for anyone to see (http://www.newtonsoftware.com/pricing.html).

Obviously, publishing pricing information is considered anathema to conventional business software companies.

The paradox of hiding your price is that it actually makes your software more expensive: hiding your price means you must employ salespeople to sell your software. Therefore, you must charge more for your product to pay their salaries and to provide them the opportunity to earn commissions. This is turn causes the loathsome cat and mouse game that most us have experienced when investigating software; ask for a little information, get stalked by a salesperson. For the record, we don’t have any sales people at Newton Software.  We keep our footprint small and our overhead low so we can focus on developing smart technology.

There is, of course, some downside to publishing price on our site. We can’t do all of those annoying things that other software companies can do, like charging one customer more than another, tricking people into long-term contracts and charging for everything under the sun(like adding users, adding forms, implementation and activation).

The other day, I was speaking with a customer of a well known payroll company that happens to sell recruiting software. This person recently hired a recruiter to replace someone that was unfortunately laid-off late last year. She needed to get her new hire “on the system”. So, she called her support number and was transferred to the sales department.  The sales department promptly explained that there is a charge for changing users. So, how did she react? Well, there was not much she could do. Buried in her 21 page contract, in section Y, article (ii) there states a clause that “adding and/ or changing a user will incur an activation cost outlined in addendum B of said contract”. She had to pay the $550 dollars for someone to flip a switch and type 10 characters on a keyboard.   We think this is crazy.

So what is our thinking on publishing our price on our website?  Well, as I mentioned earlier; if we were visiting our own website, we would want to know how much Newton costs and how the pricing works. We want you to get as much information as possible from our website about both the product and whether or not it fits into your budget.  And, we want you to be able to do this on your terms without pushy, commission-driven sales people hounding you incessantly because they have a quota to meet.

We believe that part of the reason that people put-off buying technology that could make their lives easier is because the purchasing process is so mind-numbingly painful—rife with complicated pricing formulas, too many options, long commitments, long implementations cycles ( we’ll address that is a future post), and pushy sales reps.

We design smart, easy-to-use software that takes the friction out of hiring. We want the way that we price our product to take the friction out of buying it. Tell people what they get, don’t charge for things that should be included like activation and implementation and provide plans that appeal to a broad spectrum of companies—no brainer. We think of this stuff so you don’t have to.