How to price your product is a complicated question! Ensuring you’re offering the right price for your products and services is one of the most important things to get right as an eCommerce vendor.
The basics of how to price your product
At a bare minimum you need to research competitors, the market you’re in, and what customers perceived valued of your product or service is. Once you have that you can go as deep as you want into the phycology of pricing products. Of which, there is a sea of information out there. All of those things are important to consider. However, we’ve found that one of the most important things for how price your product correctly is testing. Testing has a bad rap from your elementary school days, but it doesn’t have to be painful. In fact, testing should be one of your top priorities otherwise you’re simply leaving money on the table.
To date the only way you could test your product price was to set a price for a period of time (say one month) and then change the price the following month and analyze the data. The problem with that is the data is HIGHLY SKEWED by market fluctuations, seasonal shifts, and unique one off events. All of those things impact customer behavior in a way that makes in almost impossible to test your pricing correctly.
How to price your product with A/B testing
The good news is Never Settle just released a new WooCommerce plugin called PriceLab. PriceLab allows you to easily create a/b price tests to price your product correctly. To create a test simply name your test, select an a and b price, and start collecting the data! After a period of time you’ll have a very accurate picture of what price is a better fit for your customers. As this will show you the breakeven point between higher volume on a lower price vs. lower volume on a higher price. Below is a quick video on how easy it is to setup a test.
Once you’re test is set you’ll see live metrics and data as seen below allowing you to easily determine what the right price for your product is.
Do note, ‘never settle’ on your price 😉 once you have a successful test use that new price as you’re baseline and continue testing. As time goes on and you add new features and value it’s critical to keep a/b testing your products with WooCommerce.