Testing different price points for your products should be done to make the most profit, but also to generate the most visitors on your website and the highest conversion rate. Like with headlines, the appropriate price can attract a slew of new customers.
There are several key factors that a business owner should consider when test pricing a product.
*Product Value: When pricing a product, make sure that your selling price is greater than its worth to ensure a profit, but don’t price a product low in an attempt to possibly generate more sales with a low price. Remember that you run your business to make money and not lose it.
*Perceived Value: It’s true that target markets can differ in what they find valuable in a product, especially if it has many features/benefits. But what is also important is how customers perceive its value in the marketplace.
Pricing a product well below the standard could arouse suspicions in potential customers. They may believe that the product has been misrepresented somehow, that there’s a catch in the fine print, that the item is defective or just isn’t in demand. Don’t sell your product short by slashing prices so much that they become undesirable to the public.
*Numbers in Prices: Some numbers prove to be more inviting than others when it comes to product pricing. You can test different numbers with your own target market. Test prices ending in 5, 7 or 9, for example.
*Conversion ISN’T Everything: Do some math. You may find that a lower price results in more sales, but your profits may diminish as a result of a lower profit per sale. Sometimes it’s worth taking on fewer customers for more profit…plus you won’t have as many customer service issues to deal with.