Would *you* increase prices?

[Deric Yin]

Warriors,

I am currently doing a simple pricing test on one of my smaller products - the control price is $10 while the test price is $17.

The results so far -



If you own this business, would you increase the price from $10 to $17?

[Justin Jordan]

I'd probably want more traffic to test, but given that B made a hundred dollars more than A, I'd raise the price.

[Sleaklight]

run your test until each one of the prices reaches 100 sales, then measure your conversions ratio and profit and see which one really did better. 22 and 19 sales is not a good enough sample.

[Michael Silvester]

Hi Mate,

Forget what everyone else is saying...I base my
stats on around 300 visits. So you have more than
enough data.

Based on your stats there you made 146.8% more
money with the $17 product out of the same traffic.

Which one do you reckon

And no one has noticed that you are totally kicking
ass with your conversion rates! If these are real stats
you are onto a winner.

I'd drop the $10 and test $17 and $27

Take care,

Michael Silvester

[MicahF7]

My answer= Yes.

After you move to 17, I would do another test with the price a little higher and keep doing that until you find that best price.


Thanks,


Micah Rush


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[RevenueRabbi]

I'd test $37.

[Deric Yin]

Thanks guys.

It's a short report, and I had assumed that a lower price point would drive volume. But then I figured that the demand in this niche is highly inelastic - so hence the testing.

Going to increase the price rightaway.

[venomous2000]

That's a tough one because the $10 case is making you more money but the $17 has a higher clickthrough. I would have to go for the $17 though because it may not be making as much money but it has a higher clickthrough which means people could be bookmarking it for later use.

[Michael Silvester]

Originally Posted by venomous2000

That's a tough one because the $10 case is making you more money but the $17 has a higher clickthrough. I would have to go for the $17 though because it may not be making as much money but it has a higher clickthrough which means people could be bookmarking it for later use.

Hi Mate,

I think that you are looking at the wrong numbers mate.

This is how you work it out.

$10 x 22 Purchases = $220
Against
$17 x 19 Purchases = $323

Its the total $$$ not the click through that you
have to look at for this calculation.

Once again...the difference between making
$220 and $323 is 146.8%. Thats nearly 1 and
a half times more money.

I hope that makes sense?

The reason I explained this...is because this is
a very powerful lesson. And Once you grasp the
leverage in selling a higher priced product you
can have a lower clickthrough rate or conversion
rate and you can still make more money than
selling a low priced product with a higher
conversion rate.

Take Care,

Michael Silvester

[Neil Morgan]

Exactly Michael.

Visitor value, anyone?

Cheers,

Neil

[artwebster]

Now I see where I am going wrong. I create a product to sell at a reasonable price because of the inherent value - it never ocurred to me that value is not even in the equation, only what people are prepared to pay.

I see no refund rate - did all sales stick?

[David Raybould]

Hi Deric,

Listen to Michael S-

Drop the $10 and test higher
prices.

Keep increasing prices until
you find out what the market will
support and what makes
you the most net profit.

Good luck

-David Raybould

[Deric Yin]

Originally Posted by artwebster

Now I see where I am going wrong. I create a product to sell at a reasonable price because of the inherent value - it never ocurred to me that value is not even in the equation, only what people are prepared to pay.

I see no refund rate - did all sales stick?

I've sold 400+ of the product at $10 (silly me) and got around 6 refund requests.

I'm not in the IM niche so that's probably why the higher conversion and relatively lower refund rates.

[Deric Yin]

Originally Posted by the_writer

Hi Deric,

Listen to Michael S-

Drop the $10 and test higher
prices.

Keep increasing prices until
you find out what the market will
support and what makes
you the most net profit.

Good luck

-David Raybould

Thanks David -

I was wondering if the sample was representative enough to conclude that the results were conclusive. I suppose the consensus that they were - so I'm going on to test $17 vs a higher price next.

[Hammerman]

I also think that you should increase prices in steps. Maybe use a bigger sample of visits, but definitely raise the prices a little at a time until sales start to fall off, then back up just a little. I used this same process in my primary business, which is a service type product, and my profits soared. I was of the mindset prior to that, that in order to increase sales, I needed to be the lower priced service. You can imagine my surprise when just the opposite turned out to be true. It can be very liberating when you find that you don't have to give things away for virtually nothing to get people to buy them. Just my opinion, and it may not be applicable to your product. But it's sure worth a try, and you may be happily surprised by the results.

[Traffic-Bug]

I wouldnt raise the price in thi situation, because raising the price will possibly lower the sales.

[JMB]

there doesn't seem to be a significant difference in purchases, so I think you have the power to charge the higher price! :-)

[Deric Yin]

Originally Posted by Traffic-Bug

I wouldnt raise the price in thi situation, because raising the price will possibly lower the sales.

That was what I had *thought* initially, but it turned out to be untrue.

I was from an 'offline marketing' background - selling shampoos for a large Fortune 100 company - so I had the assumption that demand is always elastic vs pricing. It just turned out to be untrue in my online niche.

[David0022]

I fretted over a decision to raise the price of one of the
e-books I sell. I mean, it was already selling well and I
was afraid that sales would slow -- and who isn't afraid
of losing money from a profitable product?

Anyway... I took the plunge and raised the price by only $4.

3 months later the sales of the e-book never slowed (and
one month saw an increase in sales.)

The lesson I learned was quite simple:
just do it and track what happens!

-David

[Kevin AKA Hubcap]

Originally Posted by Traffic-Bug

I wouldnt raise the price in thi situation, because raising the price will possibly lower the sales.

It doesn't matter of raising prices will lower the amount (total number) of sales what matters is the total profit for the seller.

Would you rather sell 5 gadgets for $10 a piece and make $50
*or*
Sell 2 gadgets for $30 a piece and make $60.

[Daret]

In order to increase the price you should also look into getting more traffic. Otherwise, $17 seems like a good price to me.

[Deric Yin]

Originally Posted by Daret

In order to increase the price you should also look into getting more traffic.

Not sure what you mean by that. How does quantity of traffic correlate to pricing power?

[RevenueRabbi]

you can also dress up the eport by using a nice layout, images, and adding additional material if you feel some people will feel that the price is wrong simply due to "number of pages".

[Logan_5]

I'd say yes, increase the price. Maybe consider testing some kind of limited time discount. It would be interesting to see if that motivator pushes your sales even further.

[Makabongwe Maseko]

Hi Guys,

What price would you consider a better converter maybe through experience between $17 and $19.97.

Thanks.