A/B testing doesn’t work: how to implement a value-based pricing strategy
The best alternative to A/B testing (and the best technique for value-based pricing in general) is to survey your customer base. This avoids all of the pitfalls of A/B testing and will also provide you with better data. Here’s why:
Surveying doesn’t require as many people as A/B testing to execute, because you can target the subsets of customer personas you need. Plus, the number of respondents you can source will be greater than those who will show up in an A/B test, because unlike A/B testing, you can survey anyone who is a decent fit for your product, not necessarily those who are coming to your site. What’s more, running these studies works for all types of businesses, even those with large customer bases. Granted, you will then of course come under fire of things like survey bias, but these things can be controlled for, simply because you have control over the length of the study and the makeup of the respondents, rather than hoping and praying the right people see the right things throughout the A/B test.
Sourcing respondents also won’t anchor your customers or upset them. You’re asking for your customers’ willingness to pay, so they won’t be psychologically locked into a preconceived price when they’re ready to buy. Of course, this means you need to survey them properly (more on this in our value based pricing post). Yet, if and when done properly, you’ll minimize anchoring and reduce the risk of customer backlash, while making sure you avoid the ethical grey line of dynamic pricing.
Finally, and most importantly, surveying actually finds your customers’ willingness to pay, which is the ultimate goal of value-based pricing. A/B testing your pricing, on the other hand, only gives you relative data, which means it is practically useless for value-based pricing.
The bottom line:
A/B testing is never the best option for determining an optimal pricing strategy for your company. The practice works great for a lot of things, but its relative nature does more damage than good when coming to the most important aspect of your business. You’re much better off just speaking and sourcing information from your prospects, leads, and current customers.
To learn more about pricing specifics, check out our Pricing Strategy ebook, or speak to one of our experts. We're here to help.