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 
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
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
The Result
The results were astonishing, to say the least. To summarize, Meebox saw
- 121.56% increase in revenue (98% chance to beat original)
- 46.24% increase in Average Order Value (AOV)
- 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
- 5 Psychological Studies on Pricing That You Absolutely MUST Read – KISSMetrics
- Using Behavioral Economics, Psychology, and Neuroeconomics to Maximize Sales – Shopify
- How Server Density A/B tested pricing plans and increased revenue by 114% – Visual Website Optimizer
- Pricing Experiments You Might Not Know, But Can Learn From – ConversionXL
Siddharth Deswal
Marketing Associate at Wingify. Have been involved with web development for about 8 years now and actively look to help online businesses discover the value of Conversion Rate Optimization.
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3 Comments
February 9, 2013
Is this test still being ran?
Maybe this is why I’m only seeing the original version.
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.
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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