Misleading Pricing Practices – The Dark Side of Discounts
SenseHR takes a dirty dive into the unethical software pricing lures that some HR vendors use to drive sales and trap customers. Join us if you dare!
Discounts, discounts! Get your discounts!
20% OFF! This month only!
Was £5 per employee per month, now £4!
Start your FREE trial!
…These are just a few of the HR software offers that you may have seen advertised after a quick Google search.
Yes, we’re only too cynically familiar with the deafening white noise of, ‘huge savings’, ‘limited time only’, ‘cheaper than Primark’, ‘Asda price’, and ‘get your discounts here’!
Too late, too late will be the cry, when the man with the offers has passed you by!
And why do they always seem to be trumpeted in giant fonts and gaudy video-arcade colours, promising huge reductions and fleeting chances of value for money—if only your reflexes are fast enough to snatch them up before they’re gone forever?
There’s a dizzying variety of tactics in use. Products are released ‘on sale’ from day one. 20% off! is preceded by ‘up to’ in tiny font. Prices are grossly inflated for short periods of time on selected HR software products, so prices can be slashed in half the very next day.
In this article we’re going to take a quick and dirty dive into the unethical pricing lures that HR software vendors use to drive sales and trap customers. Join us if you dare!
Listing no price at all is a tactic used by countless HR software providers. Instead, there’s just a friendly invitation to ‘Book a Demo’ for a ‘free, no obligation tour’.
Nothing wrong with a free demo or tour, but we don’t want to waste our time or anybody else’s, if the price – once finally revealed, is beyond our reach.
We wouldn’t bother test driving a Bugatti if a Fiesta was at the top of our budget… bad example, I would totally waste somebody’s time to have a shot behind the wheel of a Bugatti, but you get the idea.
The hook is that you can’t possibly have one price for all, when your business is so unique. “Come into my parlour”, said the spider to the fly… Erm, no thanks, if you could just tell me the price?
Drip pricing is as grim as it sounds. Attractive ‘headline prices’ are used to lure business customers into adding to their baskets, only to creep upwards, step by unknown step, and deeper and deeper into the buying process. Implementation fee, training fee, customer support fee (free non-existent support included as standard) and other additional charges being tacked on before the close of sale.
The logic here is that by the time we’ve given our address, card information, blood, spun around five times, muttered the secret incantation, and finally, praise be, reached the hallowed land of transaction completion, we don’t have the energy to do it all again with another provider. Instead, we’ll just hold out our card and, like all Dick Turpin survivors before us, say “for the love of Human Resources, please take my money and let me go home”.
Not only do these kinds of tactics slow HR professionals down, but they make it almost impossible for them to make clear comparisons and informed decisions.
The Subscription Trap
One of the most popular sales tactics in the current landscape of Human Resources Management Systems is the subscription trap.
Now, a subscription can be a convenient way to access a service, whilst offsetting the necessary ongoing costs to the provider.
A free trial too, enabling a business to ‘try before it buys’, can be most welcome.
The rub comes when these free trials use coercive ‘FOMO’ tactics, to ensnare card details and commitment from business customers.
Here’s an example being used, at the time of writing, by one of the Jurassic leviathans of HR software –
Get started with 1 month free today
3 days : 10 hours : 26 minutes
It’s a literal countdown timer, ominously ticking down the minutes like Inspector Gadget’s latest top-secret assignment. Anxiety-inducing. FOMO inciting. 3-2-1 seconds until our offer self-destructs.
The real ‘tick, tick, tick,’ however, starts when an unsuspecting consumer falls prey to this tactic, hoping to enjoy some freebie manna from heaven. But “why”, you might ask, are you being asked to fill in your credit card details before you can enjoy your ‘free’ trial?
Stop right there or proceed at your peril!
Once your free trial is over, the offer will, according to one software company’s own terms and conditions ‘…expire automatically without notice. Upon expiry of the Promotion, all fees for the Products will revert to the current recommended retail price.’
And therein lies the ‘KABOOM’!
You’ve been captured by the cannon-net of the ‘auto-renewing subscription’.
It’s a jungle out there.
In this case, the all fees RRPs (think I just found my new rap name) that your product will revert to, are stated in nebulous terms and pixie font, to be found by following an asterisk star after scrolling a lavatory-roll-length through the hinterlands of their landing page…
*Get 1 month free, then £7 / £12 / £17 / £27 / £37 / £52 / £77 / £102 (tier dependent) + VAT per month. Terms and Conditions apply.
In other words, your card has been charged to the tune of any of the above £££ and unless you take action, it will continue to be charged, month after month, and according to their Ts&Cs.
The government calculates that:
- 47% of us have been caught out in signing up for an annual subscription because we forgot to cancel in time or couldn’t cancel even if we remembered.
- Citizens Advice surveyed 496 people affected by subscription traps and found that consumers lose an average of between £50 and £100 to them and that the “non-financial detriment, such as time, energy and how consumers were left feeling can be significant”.
- 84% of the consumers that took part in the survey didn’t realize they’d agreed to a subscription and that, as we’ve found for ourselves, “terms and conditions are frequently not clearly, and prominently displayed and key information is often hidden”.
- A survey by trusted ‘consumer champion’ Which?, found that 28% of their members had enrolled with Amazon Prime without realizing it.
Some didn’t discover the subscription for months or even years, with one inadvertent customer saying, “I only realized after four years when I became puzzled by a subscription on my bank statement, then found the same payment for four years running”.
In the world of on-demand software, it’s only too easy to be caught out by the “forgotten subscription”.
You think you have it for a year and then it auto-renews if you don’t give 2-months’ notice.
Unnoticed and unaddressed, subscription fees can mount until they’re a significant burden on your operating budget.
- According to a recent report which surveyed 465 global IT professionals at companies with 1000 or more employees, 29%, of SaaS software spend is underutilized or wasted.
Software providers shouldn’t need to try and sneak their subscription under your radar and hope that you forget about them.
For our clients, SenseHR software is integral to their business because it’s the best value, most effective all-in-one solution out there. And SenseHR subscribers aren’t left calculating the costs at the end of the year because the ROI on our clearly priced model is self-evident. And if for some reason you don’t need our services any more… you’re packing up and moving to Mars, for example, you can cancel easily.
If we want to look to the long-term future of discount culture, who better to look to than—perhaps sent from the future—visionary tech leader Elon Musk.
Love him or hate him, it’s hard to argue with the ethics of the no-discount policy he has implemented within Tesla from its inception; he calls it “fundamental to our integrity.”
What’s integrity got to do with it? Well, let’s say that Camilla gets a 20% discount because she opts in before an offer expiry of August 31st. Then Patrick comes along and has to pay 20% more for the very same service on September 1st. That’s clearly unfair.
Poor Patrick―and we all know Camilla’s loaded.
This method is typically weaponised by sales folk in the industry. And it’s not because “it’ll delay your implementation” not to sign-up by a certain date, or because “they have planned in synchrony with the project team to get you started” or “worked really hard with the director to get you this price’”. It’s because they’re in danger of failing to meet their targets for the specified period.
Meanwhile, back at Tesla HQ, Musk adopts a ‘same fair price to everyone’ principle. Saying “Customers need to know that they can always count on Tesla to do the right thing… This is why I always pay full price when I buy a car, and the same applies to my family, friends and celebrities, no matter how famous or influential. …If you can’t explain to a customer who paid full price why another customer didn’t, without being embarrassed, then it is not right. We either win in a way that is fair and right or we lose with our honor intact and accept the consequences.”
We couldn’t have said it better ourselves, so we won’t.
This echoes exactly how we feel here at SenseHR and our pricing policy reflects it absolutely.
● Transparent pricing, consistently open to everybody.
● No hidden extras.
● Fixed for life.
When you stick with us, our price will never go up, no inflation, no better deals for new customers. Loyalty for loyalty. Incidentally, something that Elon is just catching up to with his new Tesla loyalty programme.
SenseHR represents tomorrow’s software, paired with old school ethics.
So, as we hop into our CyberTrucks and vrooom our values into the future, it’s good to see that the likes of Elon Musk are catching up…