Back in July, Fliptop was criticizing its competitors in the predictive analytics space for lack of pricing transparency. Their competitors (Lattice Engines and Mintigo) responded that their products were simply too complex to post prices publicly; Fliptop was a simpler offering targeting the SMB space.
A few weeks later, Fliptop again went on the offensive noting their usability stating “Fliptop has done away with the Wizard of Oz approach to predictive analytics taken by most predictive vendors (‘pay no attention to the man behind the curtain’).”
It was all shaping up to be an interesting case of marketing jujitsu until LinkedIn stepped in and bought Fliptop for its talent.
I mentioned this anecdote because it fit perfectly with a recent study by Robert J Moore of RJMetrics that analyzed pricing transparency in the martech space. Moore found that only forty percent of marketing technology companies post pricing on their website. According to Moore, “companies justify their lack of public pricing based on solution complexity — there are too many factors, they say, that go into a price. These solutions instead offer demos or ‘contact us’ forms.”
Backbone services such as CRM, marketing automation, and ecommerce are most likely to post pricing while middleware services such as data management, tag management, and identity management are the least likely to provide details.
Companies with freemium models are much more likely to provide pricing, but only 16% of the martech firms offered a free baseline service.
Moore found that companies with freemium models are more likely to have a lower paid first tier than companies that eschew freemium pricing. Non-freemium vendors generally have their lowest tier pricing 2X to 5X that of freemium vendors. Freemium vendors averaged $100 per month for their lowest tier while non-freemium vendors were slightly above $250 per month.
If you’re a vendor and want to quote pricing publicly, the data is clear: most of your competitors are quoting in monthly terms. And they’re probably doing it for a reason.
– Robert J Moore of RJ Metrics
Moore also found that monthly pricing dominates with fewer than 15% of companies advertising annual or one-time prices. The dominance of monthly pricing held across all five martech sectors. As Moore noted, this pricing is for vendors with transparent pricing; annual pricing is much more likely to be quoted by non-pricing transparent vendors when assembling a detailed quote.
The study was based upon the 1,876 company Marketing Technology Landscape put together by Scott Brinker. RJMetrics employed Amazon’s Mechanical Turk to collect the data.