This is probably a stupid question. We are testing three price points for our mobile consumer mhealth platform. We are neck and neck with two price points which are pretty much equal in conversions, 1.99 and 4.99 which price should we pick? The high one right?
Conversion rates only provide a part of the picture. Total number or buyers and/or total top and bottom line dollars made must also be considered.
If 70 out of 140 people purchased at the 1.99 but only 2 people out of 4 purchased at the 4.99 price point - even though the conversion rate is the same (50%) and margins might be better at 4.99 - you should definitely go with the 1.99 price point. In other words - the bottom line is the bottom line.
Lower conversion rates with a significantly higher number sales still equals greater revenues. And all things considered equal this means more income/profit (bottom line money)
So heed this REMINDER: Always remember to look at all key metrics (I recommend at least 3) - and not any one in isolation.
With sales already coming in - it looks like you are on the right track and off to a great start. For any assistance with other questions feel free to get in touch with me. Best of luck!
Answered 10 years ago
Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.
Already a member? Sign in