4 ms·
From my experience doing price testing, there are certain natural grooves for prices. Generally the fit the 1,2,5 model: $1, $2, $5, $10, $20, $50, $100, $200,
by sunir 16y ago
From my experience doing price testing, there are certain natural grooves for prices. Generally the fit the 1,2,5 model: $1, $2, $5, $10, $20, $50, $100, $200, $500, $1000.
These prices have a Goldilocks structure where there is a natural market price bounded by a high and low price point.
For instance, for small business software as a service, cheap end is $10/mo, high end is $50/mo, and just right is $20/mo.
In another case, price per user tends to be $5/mo./user at the low end, $10/mo./user is the fat middle, and $20/mo./user is the high end.
You can see how the OP fit this model as he went from $5/mo. to $10/mo. to $20/mo. Without knowing his product very well, I would surmise that each price increase signaled a higher level of quality to the market while still remaining within the reasonable and expected bounds.
- aresant 16y agoYou're picking good range pricing, I'd add to that in our experience odd numbered pricing - eg 79, 95, & 99 - outperform even numbers. This seems to fit accross the board - meaning if you selected a price group to test of $10 / $20 / $50 as your first test, run a secondary test with your winner and even derivatives. EG if you sell the most @ $20, try $19.95 / 19.97 / etc - you can squeeze suprisingly large gains out from that fine tooth testing. We covered some of this a while back in our blog post on price elasticity testing w/some of our results too - http://conversionvoodoo.com/blog/2010/06/one-simple-secret-from-an-1890-economist-nearly-doubles-website-profits/ http://conversionvoodoo.com/blog/2010/06/one-simple-secret-f...