$29 = $39 [How I lost $3,200]

by Tamer
32 replies
OK, in one of my websites I'm selling a DVD course + short manual (has nothing to do with the IM niche)

I was happily selling the course for $29 (before s&h)...

Conversion rate was ~1% - nothing to call home about I know,
but It was good, because the whole thing was nearly 90% automated and stable.

I was getting like ~8,000 visitors per month - all targeted of course.

So... it's an average of 80-90 orders per month.

50% of the traffic was from organic search results...
50% was via PPC...


Now... at some point, I "realized" that i FORGOT to test many
factors in that website!

I concentrated a lot on making the product itself, and outsourcing the delivery..etc...

But i didn't test different headlines, different designs, different sales letters... and different price points!

The easiest thing to change was... the price tag!

I logged into my account, and simply changed the price from $29 to $39

Orders did NOT decrease (during 1 month, compared to the previous month before the change)..

I didn't change anything else:
the sales letter is still the same,
the auto responders are still the same
the design is still the same.
the traffic sources are exactly the same.
the traffic volume remained the same.

I counted the number of orders... since starting the website, till the price change... it was exactly 326

This means that I simply lost $10 per order ($3,260)


BUT... I LEARNED A BIG LESSON!

Split testing is not less important than any other step of product developing...

I'm now nearly sure that I will increase the conversion rate by testing other headlines, other autoresponder messages, other intervals, other designs...etc..

Well, just wanted to share a story & a hard learned lesson

Tamer
#$29 #$39 #200 #lost
  • Profile picture of the author Tamer
    oh, one more thing...

    Don't just increase the price of your product, as a result of this story
    (specially if is now priced at $29) ...

    The point is to T-E-S-T ... and never assume that you got everything right from the first shot.

    Tamer
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  • Profile picture of the author tommygadget
    Now the bigger question is what happens at $49 and did you really lose $6520 or more. What about an OTO? Companion product? There's lots of ways to flesh out a product offering.

    TomG.
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    • Profile picture of the author JeffMitchell
      Originally Posted by tommygadget View Post

      Now the bigger question is what happens at $49 and did you really lose $6520 or more. What about an OTO? Companion product? There's lots of ways to flesh out a product offering.

      TomG.

      This was were I was headed. Keep knocking the price up a tad and see where the threshold is.

      Jeff Mitchell
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  • Profile picture of the author Gary King
    Congrats on grabbing the ball and doing some testing!

    As TomG and Jeff say, keep testing to see if you can go higher or improve conversions!

    All success,

    Gary
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    OFFLINERS! Warning: Unless You Know These Pricing Secrets, You are Leaving THOUSANDS on the Table. Get Your Free Report Now.
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  • Profile picture of the author MisterMunch
    Have you considered testing selling it for $19?

    For all you know, the convertion rate can more than double.
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    • Profile picture of the author JeffMitchell
      Originally Posted by MisterMunch View Post

      Have you considered testing selling it for $19?

      For all you know, the convertion rate can more than double.

      Actually, that could be a great thing. Which is actually the total opposite of what I told you early.

      Really test all the spectrums. You never know, you could double your income by dropping the price.

      Jeff Mitchell
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      HELP NEEDED! My Mother And Her Brother have been taking care of the mother with the help of Hospice. He just had a Massive Heart Attack while taking a short vacation. My mother had to go to Florida from Indiana to be with her brother and is not financially stable from being off work to be with grandma. Any Help Would Be Appreciated. http://www.gofundme.com/vg5kt4c

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    • Profile picture of the author Kurt
      Originally Posted by MisterMunch View Post

      Have you considered testing selling it for $19?

      For all you know, the convertion rate can more than double.
      The conversion rate really doesn't matter, it's the bottom line that counts.

      AT $19, even if he doubled sales, he'd still not make as much as selling half as many at $39

      2 x 19= $38

      A case could be made that maving a bigger list of buyers is a good thing and worth losing the $1. On the other hand, some prefer fewer customers to deal with and make about 2.7% more with half the customers.

      Conversion rate is a factor, but doesn't tell the whole story. The point is to look at the bottom line, as it's the stat that really matters.
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  • Profile picture of the author Tamer
    Thanks guys... you are all correct...

    After this experience... I discovered that I had tons of things to test...

    I'm certainly going to apply some Multivariate testing tactics...

    Because I simply don't have time to test each factor by it's own...

    Trying to make some loss-control here.
    (The loss in this case is the "lost opportunity" of making more money!)

    Thanks again,

    Tamer
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    • Profile picture of the author kf
      Tamer - Have a look at Jack Duncan's recent post in the War Room. Excellent info that should be really timely for you.
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  • Profile picture of the author Tamer
    While we are on the topic of testing...

    2 good solutions that helped me in the past doing multivariate testing are:

    hiconversion.com (No affiliation)
    Muvar.com (No affiliation)

    I'm sure there are certainly other (lower cost) split test applications.

    Thanks,

    Tamer


    [EDIT] Oh... almost forgot this one as well (I'm getting old :rolleyes:
    The google website optimizer
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  • Congratulation on testing what actually matters. I see so many warriors wasting time (and traffic) testing the color of their buy buttons and stuff like that, where in fact the first thing to test should always be A) price and B) autoresponder sequence.
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  • Profile picture of the author TelegramSam
    If I were you and had a successful DVD course etc, I would go into direct competition with myself under a different website name obviously.

    That way you can more easily test larger price variations. Perhaps have a $99 on one and $39 on another site etc...

    Sam
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  • Profile picture of the author Sean Ski
    Good lesson, testing and tracking are one of the more vital parts of any campaign... they can often make the difference between a losing campaign that you think is a total bust and a hugely profitable one...
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  • Profile picture of the author xohaibx
    Testing and tracking are two vital elements that always, always need to be focused on. It's sad that many marketers ignore them since they involve putting more "work". Congratulations on realizing the secret to making high end sales on the web. There will be times when you see that an offer is not at all converting or has a low conversion rate but when you tweak it a bit it can shoot up. That's the magic of testing and it can take your business a long, long way if you do it right.
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  • Profile picture of the author Mr. Enthusiastic
    Great thread on the importance of testing.

    Sam, would you sell the same course at both sites? Or would you repackage the material into a new course? I'm not clear on how this would work.

    Chris
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  • Profile picture of the author RentItNow
    I had the reverse of this. Each time I lowered the price (as well as ran 4 day cash machine), my sales dropped significantly. I am going to the higher and higher price with a bit more content and also marketing the same product (also non-im) as a business opportunity product at a MUCH higher price. Will post how that goes.

    I'm really beginning to think there is certain information products that the sky is the limit because it probably makes the reader WAY MORE than they bought it for.
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  • Profile picture of the author CrackCopy
    The higher the price the more perceived value!

    I'm actually surprised your conversions didn't go UP, when you raised the price! Depending on the niche this tends to be the case in my experience...

    Especially Golf, for some reason. I call it the "Martha Stewart Method" ; )
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  • Profile picture of the author shabit87
    I never would've taken split testing seriously until this post. Thanks for sharing...and darn it sucks you lost 3K! But he, you won't lose out anymore...hopeufully
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  • Profile picture of the author Lisa Gergets
    See, now this type of thing is what makes this business so addicting to me...there's always something to learn, always something to test. I love it!
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  • Profile picture of the author snowprincess
    I don't have a shed load of experience in this area, but as previously said, congratulations on taking this on the chin and using it to you advantage with your future projects!
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  • Profile picture of the author Dennis Gaskill
    I had a similar experience with my first physical product. I created a CD of website graphics. I posted it for sale at $14.95. It sold, which thrilled me because I knew I would sooner or later make my investment back (it cost $800+ to have 500 CD made back then).

    As I said, it sold, and people were happy with it, but someone said I should be charging more, so I raised the price to $19.95. It converted even better, and people were even more complimentary about it. I did it again to $24.95 and it sold even better, and people were raving about the graphics.

    The higher the price, the higher the perceived value was, and the happier people seemed to be with the product. I didn't try raising it any higher after that though, because I honestly didn't think it was worth any more than that.

    The lesson is, of course, to test your price points. That includes lower price points, because you can sell enough extra product at a lower price point to more than make up for the price cut.
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    Just when you think you've got it all figured out, someone changes the rules.

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  • Profile picture of the author macchiavelli
    I was in the same situation as you!
    Tested a bunch of prices but the higher I kept going with the price of my product the more sales I got.
    Needless to say that product now sells for a billion dollars whahahah joke.
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    • Profile picture of the author Mr. Enthusiastic
      Originally Posted by macchiavelli View Post

      Needless to say that product now sells for a billion dollars
      Got an affiliate program? I'd be happy with just a 5% commission.
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  • Profile picture of the author NikkiG
    Always fun to find extra money, especially just by raising the price. I've had some products end up 10x higher price with reduced refunds and a much easier sales process.

    Test, test and test again.
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  • Profile picture of the author Mrs S
    Good reminder and one we should all do more often. When I did some mulivariant testing last year I used Google's tool with a WP plugin - it was so easy to do.

    I'm putting price point testing back onto my to do list.
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  • Profile picture of the author simplenfun
    Thanks for sharing your experience with us. I'm going to keep this tip in my note for future use.
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  • Profile picture of the author Mohsin Rasool
    Hi Tim,

    Thanks for sharing this. I know how important testing is but sometime I just get lazy to take to next level. It seems a lot of work to do Split testing... but go reminder that we
    can start with minimal work if we first test different price points...

    Keep Rockin,
    Mohsin
    PS. Yes you can add one Upsell at higher price point to see how many take that offer.
    Good Luck
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  • Profile picture of the author P.Sharma
    yes, I definitely agree with you. Not testing out things definitely leaves a lot of money on the table
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  • Profile picture of the author askloz
    Tim, $47 is just as good as $39, so that's another $2282 down the drain bud
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  • Profile picture of the author Tamer
    I have setup 3 separate websites to displaying 3 variations of prices
    $19 - $47 - $67

    (everything else will be kept the same... for now!)
    Only the product name is slightly different.

    and of course the 2 new sites won't get organic results for now, so will be comparing based on PPC visits.

    Let's see.:rolleyes:

    Tamer
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  • Profile picture of the author Mark Nouveau
    What about a seven (7)?

    I remember reading somewhere (Dan Kennedy, Ron LeGrand etc..) that just changing the number can have an effect (positive or negative) on your sales. For instance, $37 instead of $39???

    Remember, that numbers ARE also considered copy and have a psychological affect on people. Some people have superstitions about numbers. This may affect them on subconscious level and cause them (not cause them) to press that big orange ORDER button!

    Be Cool,
    - Mark
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  • Profile picture of the author Wide
    Keep us updated on the progress
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