This case study has some deep ramifications for anyone selling anything online. It shows how if you’re not A/B testing your prices, you could be leaving money on the table.
Six Pack 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 workout looked like this for both Control and Variation:
Control: On clicking Add To Shopping Cart, visitors were taken to the checkout page where the price was $19.95.
Variation: Same checkout page; the only change was that now the price was $29.95.
The above image shows that among 1,227 visitors who saw the original pricing ($19.95), 1.1% ended up buying.
Among the 1,375 visitors who saw the $29.95 price, 1% ended up buying.
Split testing the prices by using VWO, 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 values.
By A/B testing these price values, he made an extra 61.67% revenue from the Variation compared to the Control. If he were to compare them by looking at the conversion rates from 1,000 visitors each, the $29.95 price would still make him an extra 36.48% in revenue.
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 2 reasons for that:
As you’ll realize, both these situations were 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.
Thank you for your time.