07 - Transparency: Part 1 - Clear Pricing and Honest Communication

One of the most straightforward ways to demonstrate transparency as a SaaS company is to offer clear, upfront pricing and foster honest communication with your customers.

Being open about what they’ll get and how much it will cost creates a foundation for trust from the beginning of the relationship.

But transparency is more than just a buzzword—it’s a trust signal that can set you apart from competitors and reduce friction in the decision-making process.

Let’s explore why clear pricing and honest communication are critical for building trust with your customers.

Clear Pricing: No Hidden Fees, No Surprises

Do you find hidden fees or pricing that is difficult to understand to be one of the biggest frustrations as a potential customer? I sure do.

When buyers can’t quickly figure out the cost of your product, they may assume the worst—that there are hidden expenses or that your pricing isn’t competitive. This uncertainty breeds mistrust, which can quickly turn them away.

Transparency in pricing helps eliminate this friction. SaaS companies that provide clear, upfront pricing information—without any hidden fees—build trust immediately. Customers appreciate knowing exactly what they’re paying for and what they’ll get in return without any last-minute surprises.

Examples of Hidden Fees That Frustrated Customers

1/ GoDaddy, a domain registration and web hosting company, has often faced backlash over hidden fees and unclear renewal costs.

Many customers were caught off guard by increased domain renewal fees after the first year, and upsells during checkout for additional services like SSL certificates and privacy protection, leading to a breakdown in trust.

2/ Airbnb - The popular online marketplace for connecting people who want to rent out their homes with people looking for accommodation has received criticism for its lack of transparency in total costs.

Customers complained that service and cleaning fees were often added at the end of the booking process. Some customers felt misled by the initial displayed price, only to discover the final cost was significantly higher, making it difficult for users to trust the platform’s pricing.

The good news here is that Airbnb responded by implementing transparent pricing:

3/ Hootsuite - In May 2021, Hootsuite made waves when it forced legacy Pro account users to upgrade to new pricing plans.

For some users, this resulted in a 550% price increase. By March 2023, Hootsuite had completely removed its free plan, alienating small businesses and freelancers who relied on affordable or accessible access to the tool.

4/ Xero - a popular accounting software, also faced backlash when they announced new pricing plans that excluded payroll from their lower-tier plans.

One customer shared their frustration in Xero's support forum:

5/ Annature vs DocuSign

In the e-signature space, Annature CEO Corey Cacic called out DocuSign for its lack of transparency around pricing and excessive developer fees.

In a LinkedIn post, Corey pointed out that DocuSign charges developers up to $9.70 per envelope for API integrations—compared to Annature's $1.75 per envelope—criticising DocuSign’s pricing as "robbery."

Additionally, Corey noted DocuSign’s aggressive “unlimited envelopes” plans, which he described as a strategy to lock businesses into renewals at up to 10x the cost.

The lack of transparent pricing and aggressive upsells left many customers feeling misled and overcharged.

Honest Communication: Be Open About Challenges and Successes

Transparency isn’t just about pricing—it extends to how you communicate with customers about your product or service, the people behind your company, and how you conduct your marketing and sales efforts.

Both honest communication and ethical practices are critical components of trust-building.

Let’s explore how being honest in areas can either strengthen or erode trust with your customers.

Communicating Honestly About Your Product

When it comes to your product, honest communication means being upfront about both its strengths and limitations. If your product has known issues or is experiencing temporary challenges like outages or delays, addressing these directly with customers shows that you’re trustworthy and reliable.

Trying to gloss over or hide problems will only backfire when customers inevitably discover the truth.

Here are a few examples of how different software companies have approached communication with customers. I'll leave it to you to decide which approaches you agree or disagree with.

1/ Buffer

Buffer , a social media management tool, is a prime example of how to communicate honestly about your product.

Since 2010, Buffer has embraced a culture of radical transparency by sharing financial reports and revenue numbers, publicly being open about the ups and downs they face with their product and team, and the journey of building a world-class company.

One thing that I regularly observe that stands out is how Buffer CEO Joel Gascoigne is engaging with customers on social media and actively responding to feedback.

Here's one example:

Joel has also been consistent with posting some insightful takes on product marketing and customer research.

Like this:

This transparency reassures customers that Buffer is committed to being upfront and trustworthy, even when things don’t go perfectly.

2/ Basecamp

In 2021, Basecamp, a project management tool, faced significant controversy when internal policies about banning political discussions at work caused public outcry, leading several employees to resign.

Instead of avoiding the issue, Basecamp’s co-founders, Jason Fried and David Heinemeier Hansson , publicly addressed the situation on their blog. They acknowledged the mistakes in communicating the policy changes and their impact on their team and customers.

By owning up to their actions and maintaining open communication, Basecamp sought to rebuild trust with their community.

Now, whether or not you agree with their philosophies, you've got to respect their right to make decisions that align with their values and be transparent about them.

3/ Midjourney, Stability AI, and DeviantArt

The ongoing class-action lawsuit against AI image generator tools Midjourney, Stability AI, and DeviantArt highlights the importance of transparency in the rapidly evolving AI landscape.

The lawsuit claims these companies infringed copyright by using artists' works to train AI models without permission. A judge has allowed some claims to proceed while dismissing others.

As the litigation unfolds, it brings attention to the need for clearer communication and transparency about how AI-generated content is created and the implications for artists and creators.

4/ LastPass

In 2022, LastPass, a popular password management tool, experienced a significant security breach that compromised encrypted user vaults.

Rather than avoiding the issue, LastPass was transparent about the situation, providing detailed updates on what was affected and how they addressed the security lapse.

In a March 01, 2023 update, CEO Karim Toubba shared how LastPass was taking additional security steps to protect user data moving forward.

5/ BetterHelp

BetterHelp, an online therapy app, faced public criticism after reports revealed it shared sensitive user data with third parties like Facebook for advertising.

Following a $7.8 million FTC fine, BetterHelp stated the settlement was not an admission of wrongdoing and clarified that it has never shared therapy session data with advertisers.

Communicating Honestly About the Humans Behind the Company

The actions and behaviour of company executives and leaders play a huge role in shaping how the public perceives the company.

When CEOs or other top executives display inappropriate behaviour or act unethically, it can severely damage trust in the company. The public expects transparency about products and the values and integrity of the people leading the organisation.

Here are three examples of how CEO behaviour can erode trust and damage a company’s reputation:

1/ Uber (Travis Kalanick)

In 2017, Travis Kalanick, then CEO of Uber, was caught on video in a heated argument with an Uber driver, Fawzi Kamel, over fare cuts and company policies. Kalanick was recorded cursing at Kamel, which caused public outrage and raised questions about Uber’s internal culture.

Kalanick acknowledged his behaviour as "shameful" and apologised, but the incident further contributed to Uber’s growing reputation problems at the time. Eventually, Kalanick resigned from his position as CEO in June 2017, after several other scandals involving the company.

2/ WeWork (Adam Neumann)

Adam Neumann, co-founder and former CEO of WeWork, exhibited erratic behaviour and was accused of self-serving business practices. Reports of lavish spending, questionable leadership decisions, and conflicts of interest caused concern among investors and employees alike.

WeWork’s highly anticipated IPO in 2019 failed spectacularly, and Neumann was ousted from his position amidst intense scrutiny and pressure from investors. Neumann’s actions and behaviour were directly tied to the loss of trust in WeWork’s leadership, which had long-lasting impacts on the company’s reputation.

3/ CrossFit (Greg Glassman)

In 2020, Greg Glassman, founder and then-CEO of CrossFit, faced backlash after making controversial and insensitive remarks about the Black Lives Matter movement. Glassman’s behaviour, including a dismissive tweet and offensive comments on a Zoom call, resulted in widespread criticism.

Several gyms disaffiliated from CrossFit, and major sponsors like Reebok cut ties with the company. Glassman resigned shortly after, and the incident highlighted how a CEO's personal actions can dramatically impact a brand’s reputation and customer trust.

Avoiding Manipulative Marketing and Sales Tactics

In today's trust economy, manipulative marketing tactics like false scarcity, fake reviews, and unethical behaviour can erode trust faster than ever before.

While these strategies may seem effective in the short term, they can have long-term consequences, damaging your brand’s reputation and driving customers away.

Here are a few common manipulative tactics to avoid:

• False Scarcity: Tactics like fake countdown timers or misleading claims about limited stock can be tempting to boost urgency. However, customers are becoming savvier and can often spot false scarcity. If they realise that the urgency you created is fake, it can lead to a breakdown in trust. Real scarcity (e.g., limited-time offers or genuinely low stock) is fine, but it’s crucial to be honest about the situation.
• Fake Reviews: Posting fake reviews or paying for reviews that aren't genuine is a quick way to undermine customer confidence. Customers rely heavily on reviews when deciding whether to trust a product or service. Companies caught with fake reviews can face public backlash and may be penalised by platforms like Google or Amazon. Trustworthy reviews—both positive and negative—can go a long way in building customer trust.
• Unethical Behaviour in Sales: Sales teams that use high-pressure tactics or fail to disclose important information (such as cancellation fees or hidden terms) risk damaging the company’s reputation. Customers are looking for companies that prioritise transparency and fair play. Customers who feel tricked or misled may churn and leave negative reviews.

Case study: Robinhood

In 2021, the stock-trading app Robinhood came under fire for restricting users from buying certain stocks during the GameStop short squeeze.

Many users accused the company of manipulating the market to favour institutional investors, while regular customers felt betrayed. After freezing GameStop trades, Robinhood faced numerous consequences, including over 30 class-action lawsuits alleging market manipulation, significant regulatory scrutiny, and a damaged reputation.

The company has since been required to defend itself in court and has seen a decline in trading volume and revenue, leading to layoffs. This case illustrates how perceived manipulation or unethical behaviour can severely erode trust and damage customer relationships.

Actionable Tips for Transparency

• Offer clear pricing plans: Ensure your pricing page is easy to understand, with no hidden fees or unclear terms. Consider using pricing calculators to help customers see exactly what they’ll pay based on their needs.
• Be honest about limitations: If your product has known limitations, mention them clearly. This will set realistic expectations and prevent disappointment down the line.
• Communicate challenges early: Whether it’s a service disruption, a delay, or a difficult transition, being upfront with your customers about challenges can build more trust than pretending everything is perfect.
• Share Your Product Roadmap: Allowing customers to see your product’s upcoming features and improvements is a great way to involve them in your development journey.

Repurpose.io is an excellent example of a company that shares its roadmap publicly (shoutout to Hani Mourra and his team!).

However, public feature voting has its downsides as James Rose , Founder of Content Snare , pointed out in his LinkedIn post.

• Respond to feedback online: Actively engage with customer feedback, whether it's on a third-party review site like Trustpilot or Google Reviews, or on social media. If you're launching on platforms like AppSumo or Product Hunt, be ready to face constructive criticism and respond promptly. Responding to feedback, both positive and negative, demonstrates that you care about your customers’ opinions and are willing to improve.
• Address negative behaviour and press openly: When negative behaviour by someone on your team comes to light or you face bad press, take responsibility and address the situation head-on. Whether it's an internal misstep or a public scandal, acknowledging the issue, outlining corrective actions, and clearly communicating your company’s values can help regain trust. Avoid silence or defensive tactics, as these will only fuel further distrust.
• Avoid manipulative tactics: Don’t resort to tactics like false scarcity or fake reviews to drive sales. Be honest with your customers, as trust is harder to rebuild once broken. Focus on building long-term relationships with authentic, ethical practices.
• Manage pricing changes transparently: Raising prices is a delicate task, but it can strengthen trust when done transparently.

Case study: How Close announced a pricing increase without losing customers

Close , a sales CRM platform, managed a price increase effectively through several key strategies.

• Clear communication: They communicated the rationale behind the price increase clearly, helping customers understand why the change was necessary.
• Value reinforcement: Close highlighted the enhancements and benefits that justified the higher costs, ensuring customers saw the continued value in their service.
• Customer engagement: Close maintained strong relationships with their customers throughout the process, leading to a stable conversion rate and an increase in paid seats and customer lifetime value by over 10% after the price adjustment.

The key takeaway: engage with your customers, explain the reasoning behind the change, and emphasise the value you bring to their business.

Dive deeper: Social Proof: Part 1 - The Power of Testimonials, Reviews, and Data

The Long-Term Value of Transparency

When you provide clear pricing and maintain honest communication with your customers—whether about your product, your people, or your sales tactics—you reduce friction in the buying process and set the stage for long-term, trusting relationships.

Transparency signals that your company is reliable, accountable, and respectful of customers’ time and resources. Ultimately, it helps convert hesitant prospects into loyal customers.

Next Week: We’ll explore Transparency: Part 2—dive deeper into how being open about your company’s journey, mission, and values can further strengthen customer trust.

Now over to you— Do you display transparent pricing on your website? Why or why not? Let me know in the comments!

This edition was drafted with the help of ChatGPT Plus and Perplexity.ai. Image by LinkedIn AI.