Proof of why A/B testing on prices works: 60% additional revenue with ZERO effort
Today’s case study is very simple, but has some deep ramifications for anyone selling anything online. It shows how if you’re not A/B testing your prices, you’re probably leaving money on the table.
Six Packs Abs Exercises is a website run by Carl Juneau which provides training videos and guides on how to have a set of “rock hard abs”. At the time of the test, the page selling the abs work out looked like this in both Control and Variation:
Control: When clicking “Add To Shopping Cart” visitors were taken to the checkout page where the price was $19.95
Variation: Same checkout page, only change was that the price was now $29.95
The above image shows that out of 1227 visitors who saw the original pricing ($19.95), 1.1% ended up buying. Out of the 1375 visitors who saw the $29.95 price, 1% ended up buying.
Split testing the prices using Visual Website Optimizer, Carl found out that both conversion rates were statistically the same. Which means customers did not differentiate between the $19.95 and $29.95 price points. By A/B testing them, he made an extra 61.67% revenue from Variation over Control. If he were to compare them by looking at the conversion rates from a 1000 visitors each, the $29.95 price would still make him an extra 36.48% in revenue.
What do we get from this test?
While it’s obvious that you should A/B test your prices to make the most revenue, what’s also important is that you’re learning the difference in how you and your customers value your offering. To explain, I’ve used a bit of Economics.
This is the traditional price elasticity curve. As the seller’s price increases, the demand for a product decreases.
This is the price elasticity curve for this particular case. Notice the green line. There can be two reasons for that:
- The buyers value the Abs Training products higher than was anticipated by Carl which is why increasing the price did not decrease conversion rate.
- The buyers were indifferent to both prices and would have bought either ways.
As you’ll realize, both these situations are very agreeable for SixPackAbsExercises.com and Carl. Now all he has to do is A/B test his prices further to see if he’s still leaving any money on the table.
You should also check out our other Pricing related posts
Over the years, we’ve collected a large collection of posts and Case Studies related to pricing A/B tests. Check them out.
- How pricing plans evolved over time for a SaaS startup
- Basekit’s conversions increased by 25% after redesigning pricing page
- How Server Density A/B tested pricing plans and increased revenue by 114%
- Coaxing out every possible dollar: a “Pricing Page” test you can launch today
- Stop guessing! Use A/B testing to determine ideal price for your product
- How changing a single word increased click through rate by 161%