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A/B testing discount leads to 121% increase in revenue

Posted in A/B Split Testing, Case Studies on February 7th, 2013

Pricing is a tricky subject for even the most experienced marketing professionals. The inability to accurately predict how price changes will affect customer behavior makes them prime candidates for A/B testing. It is one “P” of your marketing mix that should rely on data as much as possible.

Meebox provides web hosting and cloud hosting to private customers, entrepreneurs and small businesses in Denmark. They used Visual Website Optimizer to run a test Meebox - Web hosting company in Denmark on the Pricing page where the Original had no discount while the Variation had discounts of 20% (40% for the highest plan) if customers locked in for a 2 year period. While the Variation with price discounts increased the number of people who signed up, there were pleasant surprises in store on the Average Order Value (AOV) and Revenue fronts too.

The Test

The original pricing page had basic information like cost per month, space, bandwidth and domains.

Meebox original pricing page without discounts
Meebox original pricing page without discounts

The variation also added discount information to the pricing table if users opted to sign up for 2 years.

Meebox variation pricing page with discounts
Meebox variation pricing page with discounts

The Result

The results were astonishing, to say the least. To summarize, Meebox saw

  1. 121.56% increase in revenue (98% chance to beat original)
  2. 46.24% increase in Average Order Value (AOV)
  3. 51.85% increase in conversions (customers/visitors-to-page)

Insights

If you’re offering a discount to potential customers, try to strike a balance by deriving value out of it. In this case, Meebox tied users to their service for 2 years. That is 24 months to cross-sell, up-sell and offer promotions for added services offered by the company. It’s also common knowledge that retaining existing customers is far easier than acquiring new ones because they become a captive audience who don’t mind hearing from you… once in a while.

Other pricing resources that are totally worth your while

Siddharth Deswal

I do marketing at Visual Website Optimizer.

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3 Comments
Ryan Bollenbach
February 9, 2013

Is this test still being ran?

Maybe this is why I’m only seeing the original version.

Siddharth Deswal @ Wingify
February 9, 2013

Ryan, they shifted the discount information down under the fold. This test is over but they’re continually testing other aspects of the website.

Prashant Rohilla
February 10, 2013

Hello Siddharth,

it is very obvious and proven that offering discounts has always increased sales, but what is important here is What Value is the company able to extract from this activity. That’s exactly what Meebox is able to do, locking down customer for substantial long period.

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