Insights to Price Testing & Optimizations
AMA with Jess Sejeck, Sr Vice President of Audience Development and Marketing, Adweek
JESS SEJECK, ADWEEK
“The great thing about testing initially is that you just keep trying. You fail your way to success by finding that right “sweet spot” between acquisition price and step-up rates. Having the right tracking in place is important to measure your goals. Follow the data.”
Full Transcript
*Questions submitted by community members
Transcript and highlights from our Ask Me Anything.
Welcome everyone to this month’s AMA with Jess Sejeck from Adweek! Jess is the Sr Vice President of Audience Development and Marketing at Adweek. Jess is a graduate of Villanova University with a BSBA in Business Management. She is Lean Process Certified and has her Lean Six Sigma White Belt. She has worked at several media agencies before landing at Adweek in 2017.
Hi Jess - Thanks for being here with us today!
Welcome Jess and thank you so much for agreeing to speak to our community.
Let’s get started!
Question: What type of pricing research do you recommend conducting before rolling out price points in-market to test?"
I suggest researching your competitors, as well as other similar companies. You can also conduct audience surveys using either specific ranges or an open-ended field for pricing.
Question: What is the most important thing to keep in mind when developing a price test?
Set your goals. What do you expect as far as orders? What's your expected renewal rates? How will the different scenarios model out for your overall revenue targets.
setting expected renewal rates is a great tip
Question:What has been the biggest surprise from a pricing test you conducted, and why?
We were offering short-term trials for awhile that converted to annual offers. Our conversion rates weren't as high as we had wanted them. We had felt people didn't necessarily want to lock in for an annual term after the trial. We decided to test quarterly offers leaving a little more flexibility. We thought they would perform better. Acquisitions were good, but after having enough data, once we annualized the renewal rates they weren't performing as well as we had expected.
Question: What are the most important goals to track to determine success for price tests?
Decide what the goal is? is it # of orders, conversion rate or overall revenue? What are your assumptions as far as renewal rate? What’s your CLV? You could be comparing 3 different offers with different terms, conversion rate and CLV but one with the highest CLV may not generate the most revenue and one with the most orders could have a lower CLV. Decide what means the most.
The choice between # of customers and revenue is stark and critical but often overlooked in terms of its strategic importance - thanks for pointing it out!
I think the nature of 2020 may have changed many things too as far as subscriptions. So continuing to test even via different channels.
Very interesting point about the nature of 2020 on your specific subscriber behaviors - the impact on business vs consumer subscriptions during this period isn't well reported yet"
(in case there's time for follow-up...) any key areas that you suggest looking at in competitor research?
Question: Did you go back to annual? or change something else about the trial?
After the quarterly we introduced monthly vs annual back. We're still testing different things.
hm interesting! I’m also curious as to what ultimately worked the best in converting trial members
I think the key to converting trial is finding the right step-up rate. It's still something we're continuously testing
I love that you did not abandon the effort (take the easy way out) and still see value in finding the right offer mix.
guess we will need to have you back in a few months
trial tests are interesting. On one hand, it's a customer expectation; on the other, it suggest the user to think of it as a short-term commitment. But I like the testing approach because lots of tests means lots of people get to find the offer that works for them.
Question: How would you think about testing a price for a new product where you don’t yet have any idea about the market. Like a learning product. As a standalone? An add on to a subscription? A/B test?
This is a good question . Being a small team and a fairly new subscription business, I would probably employ a third-party consultant/experts for advice and strategies here
Question: I love the forward looking, do you do forward scenario planning too or wait to see how things go? I often wonder how much time in scenario planning is worthwhile
Great question. I think it's a balance between research findings and going with your gut on what sounds right. to start Decide on a goal, put it out there, and watch the results. The great thing about testing initially is that you just keep trying. You fail your way to success by finding that right “sweet spot” between acquisition price and step-up rates. Having the right tracking in place is important to measure your goals. Follow the data.
Failing your way to success needs to be repeated. Too much focus on immediate success only serves to limit the effort, preemptively give up and ultimately waste time.
Question: Should price testing be “always on” or do you have an optimal cadence for this testing?
In the early stages after we launched our subscription model we held the 2 trial options for probably 6 months. After that we were doing a lot of price tests, trying to find the “right” price for the initial acquisition, but also the price point that had the best retention. Now that we’re a few years in with data we’re pulling back on the amount of price tests were running. We’re focusing on other tests like layout, language, etc.
We're holding our price tests back for sale times more recently
Question: How many pricing options have you tested in the last year? Was it too many or too few in your opinion? Why?
This year we only had about 5 price tests. It varied between different terms (trial, monthly, annual) or different bundle prices.
I love the distinction between price and promotion testing
We're trying to find that right "control” price, so with this in mind, I think it was the right approach in helping us focus on the goal and the data
almost a test every other month...I would say that is moderately aggressive...I hope you have acquired some useful insights.
Question: How would you quantify “a lot” of price testing? Like 1x/month? Just curious how much testing it took before finding that sweet spot for your business.
After the initial launch, I was price testing every month. It became a lot to manage and track for a small team of 2.
definitely busy
We pulled back to every other month for a bit and then during 2020 held a single offer probably for 6 months.
If you have the right resources in place anything is possible. When testing you definitely need to keep track of the data and adjust
I love that your responses have been pointing out how to make use of the data as a guide.
Question: Did you see any drop-off in terms of people signing up for annual memberships, with the introduction of a trial and monthly?
As expected more people choose the trial. Less commitment. Strategically we were trying to feed the pipeline at the beginning of the year, so it served its purpose for that test.
Question: What’s been your most successful test/optimization?
That’s a tough one. I'll say when we launched our new offer page with 3 options (trial, monthly, annual) it had pretty good success in its first weeks. It was a change from the one offer we had out so it drove a good amount of conversions. We learned people want choices. The presentation of the offer page matters too!
I wonder, does anyone really prefer annual terms per se? or do they just prefer the lower cost...?
Probably mostly price driven but I think there are some like print magazines that come with the expectation of annual
There is definitely a segment of the audience that knows they'll commit annually, especially in B2B
Anyone in particular? Mather and Proftwell are the only 2 I've heard of in this specific arena
The time has flown by!
This was fantastic! Thank you so much Jess, for sharing your learning and insights.
This was awesome- thanks so much