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Price Testing Methods

It is never easy to set the right price and in a price-sensitive society like ours, if you don’t do it right, your business will be in some trouble. This is the key reason why you need to always carry out price testing, before jumping to any conclusions. I understand that this is not a simple task, so I prepared a guide containing the most common price testing methods explained as well as some deeper insights and explanations of the price testing, in order to prepare you comprehensively for this important step.

The question we are all asking is “How do you do price testing?” but there is no unique answer to it. First of all, I will propose some factors and steps you need to consider before even starting the price test – a sort of a testing framework.

  1. Set your goal – you need to know what you want to achieve with the price test and the price change that will follow. Is it the revenue growth or the profit growth?
  2. Set the right time – timing is everything. You need to decide for how long you are going to run your test, and when is the best time to start with it.
  3. Choose category and products – this should be a category where you are selling a good volume of products.
  4. Collect data – conduct the test using the preferred price testing method and gather the important information.
  5. Analyze the results and put them into action – use the information you’ve collected for making data-driven pricing decisions.
  6. Wait for results – after a decent period from making your pricing decisions, you should check the results those decisions are bringing.

Having this framework in mind, you can start your price testing.
I prepared a comprehensive guide on price testing methods
Let me know what do you think.

What price testing method do you use?
  1. A/B testing
  2. Monadic price test
  3. Price laddering
  4. Something else
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