Ask HN: Why do companies like IBM, HP and Oracle avoid showing prices?

https://news.ycombinator.com/item?id=5249635

by qompiler • 13 years ago

9 10 13 years ago

news.ycombinator.com

Frequently I'm interested how much a piece of software or hardware costs and the only way to know the price is by contacting a sales person. What is the reason for this?

csense2• 13 years ago

They want to figure out how much the customer can afford to pay, and then charge them exactly that much.

This is discussed specifically in [1] -- while the entire essay is well worth reading, Ctrl+F "Bad Idea #2" for a discussion of why you shouldn't price your products this way.

[1] http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

qompiler• 13 years ago

Is this legal outside of the US? I remember there was a case in China in which a restaurant would charge a different price for tourists.

Makkhdyn• 13 years ago

In that case one could argue that the service is tailored to the meet the precise requirements of the client and it explains the price variation (and why the price isn't displayed).

eb0la• 13 years ago

It seems to be legal in Europe, too (I'm not a lawyer).

Sadly, procurement departments at big corporations play the big discount game (their bonuses are tied to the discount they get): don't get surprised if they try to diqualify you if you don't give a discount.

ig1• 13 years ago

I imagine it's legal almost everywhere as long as the basis for the segmentation isn't on a protected category (race, gender, etc.)

csense2• 13 years ago

A lot of people have a reaction like yours: This practice sucks and shouldn't happen!

That means we don't actually need to make it illegal; since, as the blog post linked in the grandparent notes, "it pisses the heck off of people," the free market will take care of it for us if we're patient.

That blog post mentions specific multiple instances of companies that attempt egregious segmentation getting their lunch eaten by companies that don't.

As I said, the whole article is worth reading.

ropz• 13 years ago

I concur, having worked in customer-facing roles for 2 of the 3 cited organizations in the 80s.

johnward• 13 years ago

Work for one now and agree. Putting pricing in the open would take eat away at profits. Every deal is negotiated. One customer could pay $100 an for my time. Another might be paying $330.

gregcohn• 13 years ago

Adding to the other correct answers on this page, it allows the company in question to introduce a salesperson into the equation. Even if 100% of customers were charged the same price, salespeople will be more effective closers than web pages most of the time.

As this tends to be true only when prices are high, and given that salespeople are not cheap, I generally take this to be an indicator that prices will be high, almost certainly higher than direct competitors who post their pricing prominently.

logn• 13 years ago

To continue adding to the other comments, I've seen in the large software companies I've worked for that the sales people do a lot of bundling and discounts or adding special services/products/customizations. While they tend to purvey shrink-wrapped apps, there's basically unlimited mixing/matching/customizing that goes on. Further, companies will pay differently for SLAs, license terms, support, etc.

Also, it forces you to reach out to the company which allows the sales people to start working their magic (applying pressure, creating a sense of immediacy, trashing the competition, etc).

Ask HN: Why do companies like IBM, HP and Oracle avoid showing prices?

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