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Price level testing - Please help.

by Gwuido65
12 replies
Hi there,

I am building a website and soon will launch a product. I am having trouble deciding what to price it at.

Is there anyway I can test some different price levels on real people?

Does anybody know how I could do this.

Could I set up a few landing pages and then run a small PPC campaign.

Any comments or help would be appreciated.

Thanks

#level #price
  • Profile picture of the author JamesFrancisIM
    Look at your competitor's prices, and use that as a guideline.

    However, it is better to use a price just lower than theirs (obviously), or of equal price but make the benefits of your product outweigh the benefits of their product.

    Also, the number 7 seems to be very successful lately, i.e. $27 sounds cheaper than $30.

    If you don't have any competitors, then post a link and i'll let you know what I'd be willing to pay for it

    - James.
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  • Profile picture of the author Oracle_320th
    Just offer your product at WSO and test the price level
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  • Profile picture of the author Paul Hancox
    I have recently written a report on this subject.

    What I would suggest is to do some research on what your competitors are charging for similar products in a similar format.

    Then, start selling your product at that price point, but also run a split test with a lower price, and a higher price.

    So, for example, if your competitors are selling theirs at $50, start selling your product, using a split test at three price points, i.e. $39, $49 and $59.

    Then, go with whichever price point works best for you, once you have significant results from your test.

    As for the $x7 thing, it's not as important as many make out. It's become a bit of an online "myth".

    Do not assume that 7 sells better than any other number. Do your own tests. I've found many people who have better success with 9, but it depends partly on the market, and what you're trying to convey.

    For instance, if you want to convey a saving or discount, a price ending in .99 is often more effective.

    Be careful not to fall for the six pricing myths out there...
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  • Profile picture of the author Dayne Dylan
    Banned
    I disagree...end in 7 on the prices. But yes, just test a few price points.
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    • Profile picture of the author Midas3 Consulting
      Have tested pricing in the real world time and time and time again and ending in 7 always wins, across multiple verticals. I've even found that 77.00 out sells 69.00 believe it or not. It's been far from a myth in my experience .

      In addition, Ryan Deis and crew spent a gazillion bucks price testing in multiple niches and catagorically the evidence supported a 7 ending as being superior for them.

      I also disagree to some degree about seeing what everybody else charges and going cheaper/ equal to.

      If Frank K had done that we would never have had $10.000 courses being sold, hell not even $2000 courses, we would still be stuck at $297

      And don't for 1 second believe that only applies to an IM niche. In a fitness niche I operate in, it was quite the norm for every e-book to be $37 , then the first guy thought screw that, added a ton of percieved value (which actually cost very little) then charged $97 for his product and the rest of the competition never looked back.

      The key is simply to split test, there is no other way and make sure you compare exactly like for like, an A/B rather than Monday at x price and Tuesday at a different price.

      My advice would be:

      Take a look a the competitors sure, but then increase the bonus material, position yours as being vastly superior, don't EVER presume that being cheaper than your competition is a good thing, because it's simply not always the case, infact quite often you can end up positioning your product as being inferior.

      Test, test and test again basically.
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      • Profile picture of the author Paul Hancox
        Hi Simon

        Originally Posted by SimonHarrison View Post

        Have tested pricing in the real world time and time and time again and ending in 7 always wins, across multiple verticals. I've even found that 77.00 out sells 69.00 believe it or not. It's been far from a myth in my experience .
        Sure thing. I know higher prices can sell more. All I'm suggesting is, don't simply park a price at $77 because it outsells $69. Often, these tests are deliberately testing $x7 vs "some other price", but I am suggesting that there may well be a higher price that will sell more, which is not one ending in 7.

        Ultimately, as marketers we test to discover the PRICE ELASTICITY of our products. I have found price points that sell better at 0, and 9 as well.

        There are plenty of marketers who do *not* end their prices in 7, who do plenty of testing. So 7 is not always best.

        I also disagree to some degree about seeing what everybody else charges and going cheaper/ equal to.

        If Frank K had done that we would never have had $10.000 courses being sold, hell not even $2000 courses, we would still be stuck at $297
        Sure, but if you are going to sell at Frank's price point, you've really gotta have the marketing skills to back it up! Frank's product sold at that price after a very skillful campaign involving social proof, scarcity, giving "results in advance" and building a herd mentality.

        And don't for 1 second believe that only applies to an IM niche. In a fitness niche I operate in, it was quite the norm for every e-book to be $37 , then the first guy thought screw that, added a ton of percieved value (which actually cost very little) then charged $97 for his product and the rest of the competition never looked back.
        Absolutely. Add value and charge more.

        The key is simply to split test, there is no other way and make sure you compare exactly like for like, an A/B rather than Monday at x price and Tuesday at a different price.
        Yes. There is really no better way then to determine the ideal price.

        To add to this, I would also suggest testing a (relatively) BIG price range first, ie.

        $17 / $37 / $67

        ... to really get a feel for how ELASTIC your prices are, ie. how responsive your market is to price.

        Take a look a the competitors sure, but then increase the bonus material, position yours as being vastly superior, don't EVER presume that being cheaper than your competition is a good thing, because it's simply not always the case, infact quite often you can end up positioning your product as being inferior.
        Yes, looking at your competition is really only a STARTING POINT.
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        • Profile picture of the author Midas3 Consulting
          Originally Posted by Paul Hancox View Post

          Hi Simon

          So 7 is not always best.
          Do you have verifiable data showing otherwise Paul ? Can I see the studies, because I've seen Ryans which cost over a million bucks to generate and nearly a million visitors. I'm all ears if you have data that I can utilise.

          Sure, but if you are going to sell at Frank's price point, you've really gotta have the marketing skills to back it up! Frank's product sold at that price after a very skillful campaign involving social proof, scarcity, giving "results in advance" and building a herd mentality.
          I didn't mention selling at Franks price point. I simply used Frank and a virtual newbie with none of Franks skils as examples of why underpricing competition isn't always a viable pricing mechanism.

          but I am suggesting that there may well be a higher price that will sell more, which is not one ending in 7.
          That's true indeed. However it is strange that $77 outsells $69.
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  • Profile picture of the author 4Highflyers
    It's not just about whether the "super-amazingly-ridiculously-over-copied-IM *7*-based-price" outsells '9' (for example) prices...

    ...it's also about the difference in profit resulting from those sales.

    e.g a $17 product would need to sell around 17%+ better to generate the same revenue (excluding backend calculations).

    It's interesting to look at - for example - Amazon's kindle (ebook) prices and see how
    many 7-based prices there are(n't).

    Simon:

    I've even found that 77.00 out sells 69.00 believe it or not
    You're right about testing of course.
    Did you also test 77 against 79.95? or 79.97? or 79.77?

    Best,
    Adam
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    • Profile picture of the author Midas3 Consulting
      Originally Posted by 4Highflyers View Post


      Did you also test 77 against 79.95? or 79.97? or 79.77?

      Best,
      Adam
      Only against 79.95 and 77 out sold it , but it's always awkward when things are cheaper, it's not as interesting as when 77 outsells 69.

      There's always a possibility that the tiny variations might perform better (79.77 etc) but youneed a lot of very consistent traffic to do testing on a huge number of variants successfully, there are also a ton of practical issues such as multiple product ID's etc which make it quite awkward in my model.

      Like Paul mentioned you could argue that 77 wasn't the best price but 119.95 was in which case you could argue you should test every variation between those numbers , but frankly I'm prepared to let Deis results be a solid guideline.

      He spent more money and tested against more traffic and in more niches in real world situations than any of us in IM pricing have seen before.
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  • Profile picture of the author 4Highflyers
    Forgot to mention this paragraph...

    Take a look a the competitors sure, but then increase the bonus material, position yours as being vastly superior, don't EVER presume that being cheaper than your competition is a good thing, because it's simply not always the case, infact quite often you can end up positioning your product as being inferior.
    - dwelling on 7s or 9s is way down the list of priorities in relation to what Simon
    points out there. (Thanks added).

    Best,
    Adam
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  • Profile picture of the author Gwuido65
    Thanks for all the information, really helpful.

    In my niche area most products are priced at between £20 - £40.

    I would actually like to sell the product for £47 becasue I beleive that there is significant more value in my product.

    We'll see what happens
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  • Profile picture of the author FranMurray
    Thanks, I came into this thread a little late, but I had the same question. I am making a product with a backend offer (monthly membership).

    I like the ideas here. Offer a WSO, then Split test after that and have the product end in 7. Does that basically sum it up?

    Thanks
    Fran
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