A Business Research Lab Tip
Price Point Testing
Part 2 of this article deals with "Quick & Dirty" Research Techniques for Price Point
Testing. Don't miss part 1 for a discussion of testing special offers.
Offering your product or service at the "right" price can be the factor that determines the success or failure of a promotion. Through "Price Point" Testing you can determine what "price" drives volume -- is it $15.99, $21.99 or $29.99. Therefore, by offering different prices on a test basis prior to the launch of a major campaign, can help boost your overall sales volume. Here's one example of a way to accomplish this. When using direct mail to promote the offer, split the mail list into three distinct cells by using an nth select distribution. Then, offer the product at a different price for each test cell. For example:
- Test Cell 1 - Price Point of $15.99
- Test Cell 2 - Price Point of $21.99
- Test Cell 3 - Price Point of $29.99
Of course measuring the results of the promotion is easy -- just monitor the number of certificates that come in for each given price point. Note: You must be willing to offer the lowest price point to any customer as people might compare certificates.
Additional information you might want to try to gather regarding respondents to the offer include: Age, sex, zip code, home owner, household income, presence of children and age of any children, marital status, etc. This information can help you target your list
better as well as show you what price point makes the most sense.
Do you own or manage a small business, or a department of a large business? Check out our special E-Value2003 Employee Satisfaction Survey, specially designed and priced for businesses with 1000 or fewer employees.
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