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Split-testing Product Prices

by Shaun Lee
5 replies
Hey Warriors,

I'm wondering about the ethical issues behind split-testing the price of a product. Many suggest to split-test the price point to see which one generates more sales, but isn't this unfair to customers that bought at a higher price?

-Shaun
#prices #product #splittesting
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by Shaun Lee View Post

    isn't this unfair to customers that bought at a higher price?
    Perhaps "unkind" would be a better word than "unfair"?

    It isn't unethical. One might consider it "immoral" (though I don't, myself), but of course (unlike "ethics") that's a subjective, personal judgment.
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  • Profile picture of the author Anonymous Affiliate
    Originally Posted by Shaun Lee View Post

    Hey Warriors,

    I'm wondering about the ethical issues behind split-testing the price of a product. Many suggest to split-test the price point to see which one generates more sales, but isn't this unfair to customers that bought at a higher price?

    -Shaun
    I agree with Alexa on this one: it's unkind rather than unfair, but it's necessary for your business. If someone complains, simply refund the difference. But at any rate the VERY FIRST split test any marketer should conduct would be price!
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  • Profile picture of the author centarec
    I think that this is regular thing in the offline and online business, it does not simply mean that if you buy something for one price and tell your friend and he goes in other shop of the same brand he will get the same price. Many times I have went to big computer shops lets say, and ask them for a product I have seen online(their website), they give me higher price then the one I saw online. They say the price can be different in different offers for the same product, and me as a buyer cannot do anything about it. Same here, the difference in your case is that at the end you will end up with the price you want at the end of your tests.
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  • Profile picture of the author WillR
    Originally Posted by Shaun Lee View Post

    Many suggest to split-test the price point to see which one generates more sales, but isn't this unfair to customers that bought at a higher price?
    So is it unfair when I buy a television for $1,000 only to walk into that same shop and find it on sale a few weeks later for $799?

    That's life.

    I wouldn't make a big song and dance about it though. Testing your price point is something that should be done before you go 'public' with the product. If you have already launched at one price and decide to test another, the test won't be as effective as there will be those that see both prices and look at the smaller one as a discount.

    Before you launch simply send some PPC traffic to your site and test two price points. Make sure you use a script so each person is cookied and will only see the one price point if they decide to return to the site. You don't want them seeing a different price every time they load your site.

    Be careful not to look for which price point gives you the most sales. Look for the price point that gives you the most net profit per x amount of people.
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  • Profile picture of the author techvic
    No it's not unfair. It's the customer's decision to buy.

    Price testing happens in all markets. There was an interesting thread on Reddit the other day regarding pricing differences of designer sweaters made in China and sold in the US. Retailers take two identical sweaters and put a different tag on each. One sweater is double the price of the other.

    Yet people buy.

    The sweaters cost a couple dollars to make and they are sold for hundreds. Almost the clothing version of digital products.
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