Fraud prevention pricing is still very much a blackbox. Here’s why that needs to change.
I’ve been looking to buy a new set of noise-cancelling headphones lately (you know, because of the lockdown), and of course I’m trying to make an informed decision.
That means going down a rabbit hole of professional reviews, comparison websites, and endless lists of pros and cons. I’m fairly close to creating an excel sheet with all the info I’ve gathered about sound quality, connectivity features, and battery life.
But one thing I find myself relying more on than the rest is user reviews. And better than glowing feedback, I’m especially interested in reading any negative comment I can find, no matter how nitpicky.
What is it that makes them so valuable? And why are they so much more powerful than 5-star reviews?
The Magic Number
It turns out I’m not the only one who enjoys reading negative opinions as much as positive ones. In fact, this is precisely a counter-intuitive insight that Todd Caponi discovered as CFO of PowerReviews, which helps companies integrate customer content into their platforms.
In his book, the Transparent Sale: How Unexpected Honesty and Understanding the Buying Brain Can Transform Your Results, Caponi explains how customers were more likely to purchase a product with scores ranging from 4.2 to 4.6 out of 5, rather than those with a perfect 5 out 5.
His takeaway: there are fascinating psychological mechanisms that make us seek out honest flaws rather than perceived perfection.
Instinctively, we know that perfect products don’t exist. So what we’re trying to do instead is manage expectations. If we understand the negatives in advance, we can decide if we can live with them.
And the implications are pretty radical for the world of sales. In Caponi’s opinion, we need to completely reimagine how we present our products and services in the digital age. We have to be actively transparent and to expose our flaws ourselves.
Sales strategies go through trends and fashions, which shift from year to year. But Caponi argues that, in our day and age, sales teams need to be more transparent than ever before. Customers have become attuned to insincerity, and are particularly wary of offers that seem too good to be true.
Sure, plenty of people still get scammed every year (and I should know as I work in fraud prevention), but the general trend is that consumers are becoming savvier, and better at informing themselves.
They can read through the best efforts of sales teams and marketers, and the more you try to sell your product as perfect, the harsher the backlash will be if they find out you misrepresented it. It all aligns with the consumer habits of younger generations, who are more loyal to transparent brands.
In short, honesty isn’t just the best policy: it’s now a competitive advantage.
Let’s Start With Pricing
So how does a business improve its transparency? Well, in the world of fraud tech, there’s one area that is still, in my opinion, way too opaque, and that’s pricing.
More often than not fraud tech vendors don’t even have this as a page on their websites. And the very few that do, this is what you see.
A proxy for “go speak to a salesperson.”
Of course, I understand why fraud tech companies do it. Pricing structures can get complicated to calculate. Salespeople can shine in negotiations with clients, upselling and cross-selling and building relationships. But I feel like there’s still a lot we can do to make it easier for buyers.
Optimising the Buying Process
That’s right, we need to shift the focus of our optimization from selling to buying. Chances are, your B2B SaaS is dealing with professional buyers. Why not make it easier for them in the first place?
And the surest way to start is to make the evaluation phase as transparent as possible. Buyers want to compare apples with apples, and get to the right information quicker. It saves everyone time. Worst case scenario: they realize the product isn’t for them, and they can go to a competitor. Yes, we may lose a client, but it’s better for everyone in the long run.
You can think of it as a win: you’re actually saving resources. No point wasting time and effort to support and maintain business relationships that shouldn’t have been established in the first place.
What Transparent SaaS Pricing Should Look Like
Circling back to the idea of clear pricing, it’s something I’ve thought a lot about, and I’m really thrilled to see how SEON is doing it these days.
- Offer a clear pricing table and scale on the website. We even have a pricing calculator anyone can use
- Be open about integration costs ASAP
- Free trial – something nobody else is doing in fraud tech
- ROI projection before you sign a contract
- No multi year contracts!
Quite simply, we want people to have a realistic idea of what our fraud prevention service is like. If it’s not for your company, you should know straight away as to not waste anyone’s time. If you think it’s for you, you should be able to try before you buy.
And you know what? So far it’s working wonders. 95% or our 5,000 clients came from word of mouth and inbound traffic. And transparency isn’t just something we apply to pricing. It’s part of our company DNA, and so should it be for yours.
(Oh, and in case you’re wondering, I’m buying the Sony WH1000XM3 headphones, currently averaging a nice 4.6 out of 5 on Amazon.)