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Profit Greatly By Picking The Right Price Tests!
Price tests can create more problems than benefits unless you evaluate potential drawbacks in advance. This article poses questions to help you check for those issues.
You would like to earn more money and think that a different pricing structure would help. But you don’t want to make a costly mistake. A good approach is to do a test. But you have many ideas to test. Which ones should you do?
These questions are designed to make it simpler for you to think about your choices of which pricing structure tests to run.
How can your proposed pricing tests be made more appealing?
Evaluate your potential price tests in combination has surely exposed ways that some tests could be impinged upon by competitors or reduced in effectiveness by uncontrollable circumstances. Having spent more time thinking about these tests, you may well be able to create simple adjustments that overcome some of these constraints.
For example, it may be that by choosing a different set of customers to offer the test to you can reduce both kinds of risk exposures. Alternatively, you may even have the good fortune to imagine an improvement on the potential test structures. For instance, have you considered asking your potential customers to pick from a cafeteria of price choices in the same test so that you can see how they evaluate one choice versus another?
How can you make price testing continuously easier to do?
In the course of considering your tests to decide which ones to run, you will have bumped into all kinds of practical problems. If you now assume that you will be operating a lot of pricing tests in the future, you should think about which of these hurdles can be permanently lowered or removed.
For example, you may currently have contracts with customers that make it hard to change pricing structures. Consider creating a contract that would make it easy to substitute new structures which offer greater economic incentive to consume your offerings. Simultaneously, in a failed test you may want to eliminate the structure you have been testing.
Under those circumstances, you may wish to alert your customer that you may wish to stop the test if it doesn’t fit the customer’s needs as well as both of you had hoped. Any contract involved should have the flexibility to be quickly adjusted back to what you were doing before or to move on to some other plausible test.
What have been the problems with with past pricing tests?
Even though you will be running different tests this time, the patterns of problems will be relevant. For instance, if you had confused field implementation of the pricing tests in the past due to poor communications with customers, that same fault is likely to recur with any new pricing tests unless you have already worked on that vulnerability.
Copyright 2008 Donald W. Mitchell, All Rights Reserved