This how you increase your price!

Setting the right price is a pretty difficult task. All you can do is just set a random price. You can guess, or follow your greed and fall off the business.

Here is a good example:
In 2011, Netflix implemented a 60% price increase. As a result, 800,000 users cancelled their service. It was painful.

Nobody wants to repeat this mistake. But, who is insured against such errors? All you have to do is guess and take a risk like a real beast. Right?

Wrong.

You can avoid these errors. Here is how. You need to perform a price A/B testing on a small group of your audience. After that, knowing for sure what will happen after you change your pricing, you can announce a new price to your entire audience. The other pitfall here is that, without price A/B testing, you will never know whether your current price brings you the biggest revenue or not.

Here is an example:
Brian Harris from Videofruit planned to sell his product for $97, but decided to A/B test his pricing before the public launch. Here is how:

1. He sent the $97 price to the first 50 subscribers. They bought the product.
2. Then, he sent a $197 price to next 50. They also purchased the product.

He continued to increase his price until he found which figure generated the greatest revenue. He ended up with the price: $1200, which is more than 12 times higher than his initial guess.

I love this story.