Split testing, which can also be called A/B testing or multivariate testing, is a way of conducting a controlled and randomized experiment to determine which variable will consistently outperform the other.
Split testing aims to determine how conversions can be maximized in various aspects of a website to increase sales and profit. When it comes to split testing price points, the goal of the research is to improve conversions and sales by finding the ideal price point for a particular product.
The truth is that most businesses do not put enough resources into improving conversions. They spend a lot of time and money generating traffic but not enough time and effort maximizing the profit of their traffic.
According to Eisenberg Holdings, companies typically spend $92 to bring customers to their site but only $1 to convert them.1 Store owners should know that website traffic is meaningless if people are not buying products. Despite this, only 44% of companies use split-testing while trying to optimize conversion rates2.
Manual Split Tests
To conduct a split test, incoming traffic is distributed between different variables (price points) without customers knowing that they are part of an experiment. You then wait for statistically significant information to emerge. The ideal way to do this is simultaneously because it is faster and more efficient. However, this is not possible when doing it manually on Shopify.
Here are the steps to manually split test a product's price on your Shopify store:
1.) Set your price point for one item and wait until it receives a certain amount of traffic, typically at least 200 unique visitors.
2.) Record the statistics including cart abandonment rate, total number of sales, conversion rate, and revenue generated.
3.) Change the price point to a higher amount (or lower if you went high to begin with) and wait for the same amount of unique visitors to visit the product.
4.) Record the new statistics including cart abandonment rate, total number of sales, conversion rate, and revenue generated.
5.) Compare statistics.
Keep in mind, the conversion rate isn't necessarily the best metric to use when determining the best price. A lower price point might have a higher conversion rate, but result in less overall revenue generated.
Which variable you decide to keep depends on your goals. Generally speaking, you probably want to go with the one that produces more overall customers even if it means lower overall gross sales on the front end because you have to keep in mind two things.
1.) It is by far easier and way cheaper to sell more products to existing customers than it is to acquire new customers, and
2.) you should have all your customers going into an email autoresponder campaign so you can do just that – sell more stuff after the initial sale.
Now to split test prices for ALL of your store's products, repeat this process for each. You might, however, be realizing that this can be a lengthy and time-consuming process and is very inefficient. If you're on a tight budget, split testing your prices is so important to maximizing your store's profit potential, it would be worth it to do it manually.
I, however, am not and plus we are a technology company and software startup so…
We developed the Smart Pricr App.
The Smart Pricr app is a very convenient way to simultaneously split test all of your product prices automatically. There is no need to make manual changes or wait months for results.
The app allows you to:
- Create split test campaigns for as many products you want
- Choose the number of segments you want (normally 2)
- Choose how much total traffic you’d like the test to include
- Once a test finishes, you can choose between automatically selecting the best converting price, manually selecting the final price, or reverting back to the original price
- Pause, stop or delete a test at any given point
How Split Testing Works
Let’s look at an example of how the Smart Pricr app could work for your Shopify store.
Imagine you want to add a new t-shirt to your Shopify store. You also want to see if the price point for the shirt is better at $19.99 or $24.99. Using the app, you can split the price points and send traffic to each of the price points simultaneously.
You may want to compare results after each price point gets 200 unique visitors.
After the test, you might discover that sales were about the same for both prices. This means that you can make an extra $5 per t-shirt without seeing a significant drop in overall sales.
If one price sells far better than the other, you may want to go with that price point or continue testing. You can also run another test to see if you can sell a significant number of t-shirts for even more.
With the Smart Pricr app this is all fast and simple.
Real World Case Study
Carl decided to use the Smart Pricr app for split testing the prices on his Shopify store. In his split test, he found that both conversion rates were statistically the same. This means customers did not differentiate between his $19.95 and $29.95 price points.
By split testing them, he made an extra 61.67% revenue from his variation price ($29.95) over his control price ($19.95). When he compared them by looking at the conversion rates from a 1000 visitors each, the $29.95 price made him an extra 36.48% revenue.
He decided to sell all of the products at $29.95 to maximize conversions and revenue.
Split testing is an excellent way to maximize profits and increase sales. Knowledge is (potential) power and split testing provides knowledge that can only help your business.
Split testing does not need to be difficult or time-consuming. With the Smart Pricr app, the power of split testing can be yours at the push of a button.
Our Smart Pricr app is included in our Shopify Success Bundle that includes 17 other high-powered apps, plus top-level ecommerce video training, monthly members-only webinars, quarterly live one-day workshops and comes with a 7-day free trial.
Or, you can now get the Smart Pricr app by itself, also with a 7-day free trial. How much profit are you missing out on by not having the Smart Pricr app installed and running on your store?
If you haven't already done so, start your 7-day Free Trial for the Ecomisoft Bundle or Smart Pricr App today!
In 2002, Matt dropped out of college, started his own real estate business, and 15 years later is still successfully self-employed.Matt is a husband, father of three, serial entrepreneur, and lover of comedy, craft beer, and The Ohio State Buckeyes.
Latest posts by Matt Stefanik (see all)
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