Monday, July 29, 2013

Using Conversion Optimization to increase prices

Conversion optimization is generally about reducing the anxiety a website visitor might have about making a purchase or contacting you.  The entire process is geared toward reducing friction.  Just like water, most people follow the easy path, the path of least resistance.

There's only one problem with this.  Anyone who has ever done in-person sales, will tell you, if a buyer immediately pulls out a checkbook and closes the deal, you've left money on the table.  

Google recently experienced this issue when they sold their $35 Chromecast dongle with a $24 Netflix coupon.  Google sold so many dongles the first day, they had to cancel this deal.  They could have continued, but they would be hurting both their and Netflix's business.

You want the decision to purchase to be easy, but you don't want to hurt your business by selling.  There is such a thing as good resistance:  Purchasing friction that increase the quality of your sales.  

If your prices are too low, conversion optimization can be used to test and succeed with higher price points.  You don't do this by just picking 3 random prices and seeing which one sells the most.  No.  You need to choose your price based on your business.  Come up with the right price that will help your business succeed and scale.  

Many companies are scared to increase prices because they know it will invariably mean less business.  When raising prices, you can use conversion optimization to maintain or increase your flow of business.  You can test different ways to reduce the added anxiety from higher prices.

Coupons, liberal return policies, testimonials, case studies, and social proof are just a few examples of ways to reduce anxiety and increase confidence.  Conversion optimization will help you discover the best way to give your visitors more confidence in their purchase.

If your pricing is too low, too much business can actually sink you.  Using conversion optimization to increase both sales and price will let your business continue to grow long into the future.