lower prices = higher revenue

Quick, someone send this to apple so they will lower the price on the new ipad 3, I doubt they got the message.

This isn't a given. It really depends on what it is that you are selling. Your mini report was selling better at $7 because it's a mini report. However, if you were selling a "course" at the same price points, you might find that the higher price attracted more people because you are offering them something with more perceived value. This is especially true when pricing professional services. People assume that there is a reason someone charges more money and are wiling to spend the money to get premium service.

I see that the $7 converted at 14.5%. That means from 100 people reading the page, 14,5 would buy. That leads to $101,5 right?

For Version 1, if you do the math, the revenue would be (per 100 people reading the page): $99,59

However, for Version 3, the result is $109,99.

So ... the higher priced item made more revenue, right?
Or am I missing something out?

You really think lower prices=higher revenue? You can't be too certain!

You tell Terry Dean, Allen Says, Willie Crawford and Me that and i'll tell you that you are looking at the world through a mirror...

Here is a simple test.
A $7 item converting at 10% with 100 views = $70
A $70 item converting at 2% with 100 views= $140...
If you ask me which is better, I know the answer.

Factor in support etc and you'll have better idea.
Do you also know that people that buy higher priced items don't demand for as much support as those that buy lower priced items? I'll leave you to find that out...

Finally, it's all about the value though. Value determines the price of an item. A 7 page report may sell for $97 while a 100 page report may command a $7 value...moreover, what you do with the leads from your lower priced items is important.
I am talking about sales funnel here...

Tim

Price elasticity of demand is a very basic economic theory that some of you should know better!

Without knowing the price elasticity of demand of your product or service, you simply cannot theorise over this.



Regards
Will

Hmm... why is it that the $7 product had over 1000 more visitors than the $9.95 product AND the $17 product?

The $9.95 product had a conversion rate of 10.01% - I'm fairly certain that those extra 1000 visitors (of the same quality traffic as the rest that were sent to that product) would have had a substantial impact on the outcome of this 'test'.

My question is - why didn't they just send (roughly) the same amount of visitors to each product for a more fair comparison?

EDIT: Even with a 6.47% conversion rate on the $17 product - the 10.01% conversion rate on the $9.95 didn't bring in as much revenue. These two products had the same amount of visitors (within 21 unique visitors).

Also - this 'test' didn't state where the traffic was coming from (was it targeted, did it come from SEO, PPC, Offline or somewhere else?). They never mention whether they were hard-selling or soft-selling through a list or even if they were pre-selling first (building trust before asking for the sale).

We were not shown sales pages, copywriting ability or product quality (including bonuses and the mention of money-back guarantees) so we're left to 'assume' - which is never something you'd want in marketing.

If this is your sole reason as to believe that higher profits stem from a low-price point, then I would seriously reconsider your overall marketing strategy.

Lol - sorry, I still don't get it, I'm not that great with numbers at all.

So what's the bottom line?