How Do You Decide How to Price Your Product? And How Do You Know If You Got It Right?

  • No, it was a little too expensive
  • 8%
     
  • No opinion
  • 53%
     
  • Yes, it was priced just right
  • 14%
     
  • No, it was way too expensive
  • 9%
     
  • Yes — in fact, it is worth more than I paid for it
  • 16%

    At FamilyLink.com, we have been selling a particular product for more than a year now. We have had more than 10,000 people purchase it. We have always wondered if we priced the product correctly. Could we have sold a lot more at a lower price? Or did we actually underprice the product?

    Since our consumer panel is so huge (we have 20MM monthly visitors to our Facebook application), we ran a couple of surveys recently to determine what people thought of the pricing. We limited this question to those who had already told us they had purchased the product.

    So far we have had 182 responses from people who already own the product.

    We are now going to run this same pricing survey to people who are interested in the product but have not yet purchased it.

    If you sell a product or service, how do you determine how to price it? And have you ever run a survey of buyers (or potential buyers) to see how they felt about the price?

    It is so important to get pricing decisions right. If the product is sold online, you can do A/B testing to see what works best. But what about for product sold in stores or in other channels? I’m very interested in knowing what methods and tools people use to make this decision.

    Posted via web from Paul’s posterous

    One Comment

    1. Michael White

      I was just thinking about this today. Perhaps you could display a random price within a certain range to each visitor before eventually letting them know what the real price is if they decide to buy it. You could then see how price affected the percent of visitors who added the item to their cart, and determine the optimal price. This might have ethical issues, though.

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