Expensive isn't always better in construction software solutions

Do you think £3.99 is different to £4.00? Do you fall for "marketing hype" and pricing strategies? Do you think expensive always means something is better? Does being cost effective ever mean your service or product is inferior to those that are the most expensive? How do you feel about hidden fees once you commit to something? Fonn is a cost effective solution with no hidden fees, pricing on our website and unlimited everything - just like it should be.

Understanding the psychology of pricing is an absolute art

The way companies price items, using £3.99 instead of £4.00 isn’t just about making it feel like three quid instead of four. If you are trying to buy a car for £15000, you are more likely to try and negotiate in £100 or £1000 increments, whereas if the car is £15550, you are likely to try £50 increments.

One of the best strategies is the “marketing placebo effect”, where we are programmed to assume that just because something is more expensive, it is superior quality to the cheaper alternative. This is why we enjoy things like expensive steaks, wine and other luxury items.

A friend of mine runs a pub, and they sell 3 similar priced brandy spirits - all in equal volume. I suggested selling one for a pound more than the others, that brandy now outsells the others by a 4 to 1 ratio.

Monster cable sells high-end audio cables that are often hundreds of pounds, but in a scientific test were found to perform only marginally better than coat hanger wire over smaller distances. Over longer distances, they do offer a superior experience, but the end-user often didn't need to use them over long distances - they were sold regardless of the consumers actual needs.

How this impacts construction tech

Software companies are just the same. Some, price their product to appear superior to the competition, where the client has no real budget, they are often sold on the fact that the solution is “the best” and the others are not as good. These companies also try to lock the client into long sign-up periods, with small discounts to incentivise the client to buy-in.

For many years, the first movers were stuck with the choice of 2 or 3 providers, who had a captive audience and only targeted the top construction companies, charging excessive fees for software that hasn’t evolved since the nineties. A wave of tech disruptors has attempted to offer alternatives at various price points. Navigating the marketplace is difficult at best. Many companies don’t have pricing on their website, have hidden fees for training or premium features, and lots of services that you have to pay extra for. Sometimes construction companies go for the most expensive, thinking they are getting the best....

Instead, it would be better to spend time trialling a solution and making sure it is the right fit for your company. If the software supplier you are considering doesn’t offer any sort of trial, ask yourself why. Does the price seem to be excessive compared to the others? What do you actually get for your money? Do you need every feature? What is the renewal process? We have heard of some suppliers who renegotiate after your initial term (or sometimes midterm) and increase costs based on your growth, usage, or other external factors.

Fonn is a cost-effective solution. Clients typically save 30% on their subscription costs compared to more expensive options, and we use your investment to improve our product and service—not sponsor an F1 team. We also offer a short-term proof of concept, where we can show you how Fonn will work for you, without a massive time or financial commitment.

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