Gone are the days when you set an arbitrary price point and moved on to the rest of marketing…
Yes, I said, "The rest of marketing." Did you forget? Pricing is one of the four Ps of marketing and often the most crucial and overlooked part of a good business and marketing strategy. (The other three are Product, Promotion, and Placement.)
So long as you aren't obligated to a Manufactured Advertised Price (MAP), you should be strongly considering testing various price points for your products in order to maximize one of your 3 potential goals:
- More Customers
- More Revenue
- More Profit
Typically, more customers are the lowest price, more revenue is somewhere near the middle, and more profit is your highest price (but often comes at the cost of customers and top-line revenue).
Price Testing: Longitudinal Test or Split-Test
Typically, the best way to come to a concise, data-driven conclusion on the benefit of any change to your website, pricing, customer service strategy, or really any changes to the business that will impact sales is a true split test: Send half of the traffic to A and half to B, wait until statistical significance (1-4 weeks, sometimes more depending on volume) and then, the results and go with the better performer.
This can be done with pricing, but it typically should not be. Here's why: If customer A and customer B see different prices, then they talk to each other…, and someone's going to be unhappy. This is seen as underhanded, if not downright unethical.
Now, if you had different prices for different regions, shipping costs, or first-time customers vs. repeat customers, that wouldn't be so bad. However, typically, split-testing pricing is out due to the nature of the test.
So, instead, you usually have to do a longitudinal test. What's a longitudinal test, you ask? It looks at the performance of price A over an extended time and then looks at the performance of price B over an extended time. Typically, we test the lower price first. Now, a lot of market dynamics can change - seasonality, quality of traffic, influencers blowing up your brand, whatever it is. This is why longitudinal is the worst of the two options, but you can still be relatively certain of the results.
What Makes for a Good Price Testing Tool?
Why do you need a tool for this? You can change the price by looking at the data.
That could be an easy way to do it if you have one product, but it will have its shortcomings.
A few things that price testing tools help you with are:
- Tracking the results: First and foremost, they make it much easier to track the test results and calculate statistical significance.
- Predicting optimal price-point.
- Changing price points based on changing goals, changing inventory levels, or changing market dynamics (competitor pricing, new products on your site, etc.)
- Optimizing your discounting strategy.
The Future of eCommerce: Dynamic Pricing
I did a three-part mini-series on Pricing and Price Testing, and the only logical conclusion you can draw after seeing the evolution of eCommerce and the evolution of the pricing tools that support eCommerce is that the future is going to be dynamic pricing.
What is dynamic pricing?
Dynamic pricing is when your product's price point changes on a regular basis, given supply, demand, and/or other industry factors. Now, it may be that you're changing the pricing based on changes in these factors or that an AI algorithm is changing pricing - similar to how algo-bots are the majority of trades in the stock market today. And just like the rise of the algo-bots, you can expect the future of eCommerce to be the rise of the AI-pricing bots for eCommerce merchants.
Take a listen to these podcast episodes for more information, and don't forget to subscribe and review:
The Future of Competitive Pricing for eCommerce
The Future of Pricing and Price Testing for eCommerce
The Best Pricing and Price Testing Tools for eCommerce
Prisync
Prisync allows you to monitor your competitor's pricing and set pricing rules based on stock availability in your store and your competitors' stores. This allows you to control the price point at which you sell.
Features:
- Batch Data Importing
- Bulk Data Management
- Marketplace Data Tracking
- Product Variant Price Tracking
- Stock Availability Monitoring
- Unlimited Competitor Tracking
- Worldwide Site / Currency Coverage
- Category / Brand Performance Analytics
- Frequent Price Updates
- Price History
- Price Positioning Comparison
- Price / Stock Availability Analytics
- Daily Email Reporting
- Daily Price Change Notifications
- Excel Reporting
- Instant Price Change Notifications
- Smart Match
- Price Violation Detection
- Recommended Price Suggestions
- Repricing / Dynamic Pricing Rules
Pricing:
Plans start at $59/month for up to 100 products, $129/month for up to 1000 products and $229/month for up to 5000 products.
Pricestack
Incredibly Robust Price Testing for Mid-Market Merchants
Pricestack is the most robust price-testing tool for mid-market merchants. Using their machine learning algorithms and all of your store data, they can accurately predict the best-selling or most profitable price for any of your products.
This product has an exponential effect on growth-stage businesses and those with a ton of data.
Important note: Split testing pricing is generally frowned upon. You don't want customer A to get a different price than customer B on the same day at the same time. You have to test longitudinally (before/after).
Features:
- Price Testing Analytics
- Onboarding Services
- Integrations
- Cross-Product Price Elasticity Analysis
- Inventory Aware Optimization
Pricing:
You can optimize 10 products for up to $100k/month in sales, using standard eCommerce integrations like Shopify and Google Analytics for free. Moving into premium integrations (like WooCommerce) and analyzing an unlimited number of products and sales goes up to $49/month.
The most premium package, which includes custom onboarding, expert consulting, premium identity services, and more, is $499/month. This is perfect for Shopify Plus merchants who are doing $5mil+ with a wide variety of products, but other scenarios could benefit from it as well. When you optimize your pricing for profit, you can improve your ROI on this tool.
Leaflet
Phenomenal Price Testing Tool for Shopify Stores
Leaflet is a price testing tool that will help you find the most profitable price for each of your products. It tracks the variant price and then automatically calculates the statistical significance of the results to prove the best price to use. So cool!
With Leaflet, you can design your price test, or you can use the tests that are suggested by their AI (based on your historical site data). You decide which product you want to test, enter the new price and click start. Leaflet then automatically applies your new price to your Shopify store, and voila! It's done!
Features:
- Artificial Intelligence Test Price Suggestions
- Longitudinal Testing
- Profitability Calculation
- Multi-Variant Price Testing Support
- Price Testing Analytics
- 'Done For You' Pricing Analysis
- Tracking Price and Discounted Sales Price
Pricing:
You can get unlimited parallel tests starting from $40/month, which gives you 10 test suggestions at a time. The premium plan includes up to 1,000 tests at a time with up to 1,000 test suggestions.
Listinguish
The easiest way to increase your eCommerce Sales
In a competitive eCommerce environment, your customers will want to buy the most affordable product. Distinguish tracks your competitors and allows you to sell your product at the highest profit. Distinguish makes your work and life easier!
Features:
- Data Management
- Data Importing
- Unlimited Competitor Tracking
- Product Variant Tracking
- Stock Status
- Supports Currencies
- Detailed Filtering
- Category / Brand Analysis
- Quick Price Checks
- Price History
- Price Positions
- Price / Stock Analysis
- Change Reports
- API Access
- Excel Reports
- Recommendation Robot
- Price Violations
- Optimum Price
- Automated Pricing
- Dropshipping
Pricing:
Listinguish pricing plan starts at $8/month for pricing data for Marketplaces such as Amazon, Ebay, Any Marketplace and $10/month for pricing data that can be obtained from any eCommerce site.
Price2Spy
Price2Spy is a price monitoring, comparison, and repricing tool meant to help eCommerce professionals keep an eye on their competitors or retailers.
Features:
- Price Comparison
- Price Change Alerts
- Reporting and Price Analytics
- Smart Spidering
- API Integration
- Full Market Overview
- Customizable Pricing Dashboard
- Alerting Mechanisms
- Price Comparison at a Glance
- Identifying Repricing Opportunities
- Historical Reporting
Pricing:
Pricing starts at $19.95/month for the Basic Plan, which enables you to monitor up to 100 product URLs. The premium plan costs $999.95/month and enables you to monitor up to 50,000 product URLs.
Minderest
Experts in Price Monitoring
Minderest's Pricing Tools are a complete suite of cloud-based tools for retailers and manufacturers/brands looking to enhance their price positioning in online and offline channels. Endorsed by some of the most prestigious Fortune 500 companies, SaaS price monitoring allows retailers to react quickly to competitor sales strategies while helping brands anticipate price wars within their distribution channels.
Features:
- Price Intelligence
- Competitor Price Monitoring
- Catalogue Intelligence
- Dynamic Pricing
- MAP and/or MSRP Monitoring
- MSRP inStore
- Distribution Channel Analysis
Pricing:
To learn more about pricing, schedule a demo with the Minderest team.
Competera
Pricing Platform for Online and Omnichannel Retailers
Competera is an AI-powered platform that helps retailers set optimal prices. Dominate your market with cutting-edge Machine Learning technology combined with the best econometric practices.
Competera pricing platform delivers a combination of proven pricing theories and best econometric practices bundled into end-to-end solutions: pricing analytics, automation engine, price optimization strategies, platform integrations, algorithms library, category and portfolio management system, custom pricing design, and professional services.
Features:
- Alerts/Notifications
- Benchmarking
- Competitive Analysis
- Competitor Price Tracking
- Custom Pricing Rules
- Dashboard
- Dynamic Pricing
- Elasticity-based pricing
- Forecasting
- Machine Learning
- Market Data Analysis
- Multi-Store
- Predictive Pricing Models
- Price differentiation
- Price Forecasting
Pricing:
Pricing is available upon request.
Skuuudle
Scalable eCommerce Price Tracking
Skuuudle is a leading provider of price and product intelligence solutions, empowering businesses to optimize their pricing strategies and gain a competitive edge in the eCommerce landscape.
Features:
- Product Matching
- Price Scraping
- Quality Control
- Pricing Dashboard
- Flexible Data Collection
- Comprehensive Data Types
- Fully Managed Service
- Legal and Ethical Compliance
- Global Customer Base
Pricing:
Skuuudle offers flexible pricing tailored to each client's specific requirements, based on the number of websites, products, and monitoring frequency needed. Typical annual spending ranges from $10,000 to $1,000,000, with larger enterprises investing six figures annually. The platform delivers exceptional ROI, with customers often seeing returns exceeding 100x. For instance, a modest 1% price adjustment on half of a $500 million revenue can generate an additional $2.5 million in profit, illustrating the substantial impact of Skuuudle's insights.
Pricing Intelligence by Wiser
Continuously determine proper selling prices with multichannel and marketplace support. Turn competitive insights into opportunities with automatic price monitoring. Test strategies with automated pricing and create customized pricing rules for products on all online sales channels. Deliver compelling promotions that improve sales while increasing customer satisfaction. Automating price monitoring across your competitors improves efficiency and turns competitive insights into opportunities.
Features:
- Competitor Price Tracking
- Dynamic Pricing
- Market Data Analysis
- Multi-Store
- Predictive Pricing Models
- Price List Management
- Pricing Analytics
- Profitability Analysis
Pricing:
For pricing info, contact sales.
PriceBeam
Find the right price for your product.
Almost all companies struggle to price right. They use methods such as cost plus a fixed margin. They use guesses and gut feelings. They peg their price to a competitor's. They price themselves too low, leaving money on the table or too high, forsaking sales volume. They lose out on the profits they should be earning.
PriceBeam changes all that. Confirmed to be accurate in thousands of projects, PriceBeam takes the underlying technology to a unique, never-before-offered self-service to companies of all sizes that quickly, accurately, and affordably discover your customers' willingness to pay for your product or service.
Features:
- Benchmarking
- Competitor Price Tracking
- Dashboard
- Dynamic Pricing
- Elasticity-based pricing
- Market Data Analysis
- Multichannel Distribution
- Panel Management
- Predictive Pricing Models
- Price differentiation
- Price Forecasting
- Pricing Analytics
- Profitability Analysis
- Promotion Optimization
- Reporting/Analytics
Pricing:
For pricing info, contact sales.
Qualtrics XM
Sophisticated research makes it simple.
Qualtrics CoreXM is the top-rated online survey tool for capturing, analyzing, and acting on data. Our flexible platform features make it easy for you to build beautiful, complex surveys with drag-and-drop ease. You are in control. Leverage 100+ question types, embedded data, branching, display logic, quotas, email triggers, mobile and offline compatibility, randomization, and all the advanced features you'll ever need.
Features:
- Alerts/Notifications
- Audience Targeting
- Benchmarking
- Campaign Segmentation
- Collaboration Tools
- Competitive Analysis
- Data Analysis Tools
- Data Visualization
- Email Marketing
- Face-to-Face
- Funnel Analysis
- Heat maps
- Idea Management
- Landing Pages/Web Forms
- Market Data Analysis
Pricing:
For pricing info, contact sales.
Final Thoughts
Price testing is one of the most effective ways to impact your primary goal metric—be it conversion rate, revenue, or profit. To price test effectively, you need to have a strong understanding of your competitor's pricing and discounting strategy, changes in outside market dynamics, and, most importantly, how changing your pricing affects sales on your site—known as "price elasticity."
When used properly, these tools give you the power to understand each of these components better and better test your pricing to really achieve success equivalent to, say, better-targeted ad campaigns or faster page speed load time. It's funny how quickly so many merchants forget that a change to pricing could be better than shaving 1 second off their page speed load time.
Anywho, these tools are all quite powerful at helping you solve this complex puzzle. Still, none of them will work for you unless you're willing to do a deep dive into understanding the fundamentals of pricing and work with your team, maybe even your suppliers or partners in some cases, to test changes to your pricing, study the results, and continue to iterate based on the data. Good luck!
