ON PRICE TESTING

When we’re price testing, we’re looking for the price that makes us the most profit per customer. Profit here is everything- we can’t test a price that we can’t afford. And, at the same time, we can’t afford to sell our products for a price that nobody wants to pay. This is the dilemma. This is what I want to solve for today (3 stories on the subject of pricing / price testing). <3 <3 <3 

1️⃣. ASSUME YOU’RE ASSUMING.

1st, I’ll please tell you a story of why price testing is important. It’s because what we assume is often wrong. A brand of mine tested $25 vs. $30 vs. $35 vs. $40. The same exact product. 

Do you know what won? By a LANDSLIDE? $35. 

$35 had more conversions than $25. A TON MORE. $25 wasn’t even the 2nd runner up. This was unexpected. This changed the course of this business. They became more efficient and learned how to acquire more customers for less money and made more profit from this price test. They confidentially locked in at $35 and had room to run promos that brought the product to $25 during key periods (BFCM). In that case, $25 worked REALLY well. When it was $25 and on sale vs $25 evergreen pricing. Evergreen $25 cost more to acquire the customer than evergreen $40. ‘Twas shocking. 

All of this is unpredictable. Unless you test it and then you know you didn’t guess or just choose a number that you like or that makes sense on a spreadsheet. The move is you have to make it make sense on a spreadsheet AND in practice.

🧛‍♀️ 🧛‍♀️ 🧛‍♀️ 🧛‍♀️ 🧛‍♀️ 🧛‍♀️

2️⃣. TEST SHIPPING PRICE, PLEASE. 

I worked with a brand that would run aggressive sales during BFCM and other key periods. During these sales, the product would be more than $15 off. But, no matter the promo, they were never comfortable testing free shipping. Shipping was locked at $7.99 per order.

In my professional opinion, that’s dumb. Nobody wants to pay shipping!

Especially not $8. This example is of a price test that never was. They went steeper and steeper on sale-period promos, but never tested removing an obvious barrier. That’s what I want you not to do.

Price test not just evergreen pricing, but also shipping, but also even numbers vs odd numbers, your free shipping thresholds, etc. IT ALL SHOULD BE ON THE TABLE. PLEASE! 

🙇‍♀️ 🙇‍♀️ 🙇‍♀️ 🙇‍♀️ 🙇‍♀️ 🙇‍♀️

3️⃣. SOMETHING I DO AS A SHOPPER

I, for example, just sorted on Sephora by most expensive Lip Liners. Not because I want to buy the most expensive, but because I associate more expensive = better. Vapid of me, but true. So then I usually end up buying something that isn’t the most expensive but I feel good about my choice because I got to see the “best” and then decide against it but in an empowered way. That’s what I do. 

My point here is that this is how I shop. Meaning when I’m devising a price test, I have to think of what price I’d want – but also what price I wouldn’t want.

All of these must be tested because I don’t know better and neither do you. The data will teach us, case by case. It’s fun that way. And, you can sleep well knowing you didn’t assume your way into a big pricing mistake. Anti-aging! 

🧖‍♀️ 😴 🧖‍♀️ 😴🧖‍♀️ 😴