Finding the perfect price for your products can be a challenge, particularly during times like these.
One powerful method to dial in the perfect price is through split-test (or A/B test) pricing.
What is pricing split-test?
It’s a strategy where two different price points are tested against each other to determine which one performs better in terms of sales and revenue.
How to leverage pricing split-test to boost profits
Here’s a step-by-step guide to maximize revenue with split-test pricing:
- Choose two distinct price points. This might be your current price versus a new price, or two entirely new price points.
- Segment your audience. Randomly segment your audience. Each segment should only be exposed to one price. Everything else on the landing pages should be the exact same.
- Run the test simultaneously. To account for external factors such as seasonal demand or competitor actions, run both tests at the same time. Check to see which gives you the most revenue and the highest conversion rate.
Once you have results, analyze the data.
Don’t look at the number of sales only, but also look at the overall revenue and profit margins of each price.
Maybe the lower price point had fewer purchasers but a higher average order value, for example. Identify these trends, and you may just increase your revenues.
Ready to test?
Try it out and let us know how it goes!
