The document discusses principles for presenting price in marketing. It describes an experiment conducted by a sports entertainment company to test when to reveal price on their landing page. Removing or de-emphasizing price early in the customer journey resulted in a 96.6% increase in conversions. The document outlines three key principles: 1) Price does not equal cost, as other psychological factors contribute to perceived cost. 2) Price can be presented either positively (P+) or negatively (P-). 3) Price must be tested to find the optimal price point, as intuitions may be incorrect. Testing different price points in an experiment resulted in the lowest price generating the highest total revenue and return on investment.

1. When Should You Reveal Price?
The 3 principles of presenting price and how they helped one
company generate a 97% increase in conversion
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TODAY’S PRESENTER
Dr. Flint McGlaughlin – Managing Director, MECLABS
Flint McGlaughlin is the Managing Director of MECLABS Group. The
organization has partnered with key market leaders including The
New York Times, Microsoft Corporation, and Reuters Group.
Dr. McGlaughlin also serves as the Director of Enterprise Research at
the Transforming Business Institute, University of Cambridge (UK), as
the Chairman of the Board of Governors for St. Stephen’s University,
and as a Trustee for Westminster Theological Centre. Dr. McGlaughlin
originally studied Philosophy and Theology at the University of
London’s Specialist Jesuit College.
Today, his primary research is focused on enterprise as transformative
agent. His work has won multiple awards and has been quoted in
more than 13,000 online and offline sources.

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EXPERIMENT: BACKGROUND
Background: A large sports entertainment provider sought to increase
conversion on it’s main landing page.
Goal: To increase league start-ups
Research Question: Which page will generate the most league start-ups?
Test Design: A/B Single factor split
Experiment ID: TP1645
Record Location: MECLABS Research Library
Research Partner: [Protected]
Research Notes:

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EXPERIMENT: CONTROL
• The original version of
the page emphasized
the value proposition of
the app software itself.
• We wanted to test
emphasizing different
aspects of the value
proposition as well as
the impact of
deemphasizing the
price.

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EXPERIMENT: TREATMENT #1
• For this test, we were
limited to changing only
the banner section of this
page, and our language
was constrained.
• In the first treatment, we
shifted the focus of the
message from the app
itself to the value of the
free trial.
• We also tested the effect of
de-emphasizing the price in
the eye-path.

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EXPERIMENT: TREATMENT #2
• In treatment 2, we shifted
the focus of the copy and
images to emphasize the
value of the company.
• However, the most radical
change is that we
completely removed the
price from this page
altogether.

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EXPERIMENT: RESULTS
Web Page
Free Trial
Week 1
Free Trial
Week 2
End of Free
Trial
Web Page
Free Trial
Week 1
Free Trial
Week 2
End of Free
Trial
Web Page
Free Trial
Week 1
Free Trial
Week 2
End of Free
Trial
Control
Treatment 1
Treatment 2
• THE CONTROL strongly emphasized the price at the beginning of the
process. TREATMENT 1 revealed, but de-emphasized the price on the first
page. It was not until the second week of the free trial that price was
emphasized. TREATMENT 2 did not reveal the price at all until the second
week of the free trial.
The Presentation of Price

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Subscription Path
League Start
Rate
Rel. diff
Statistical
Significance
Control 5.01% - -
Treatment #1 9.25% 84.6%
Treatment #2 9.85% 96.6%
97% Increase in League Starts
Treatment increased conversion rate by 96.6%
99%
EXPERIMENT: RESULTS
99%
What You Need to Understand: In this case, there was a strong
relationship between the moment the price was revealed and the
conversion rates. When price was de-emphasized early in the process,
we received a greater response from prospects.


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EXPERIMENT: RESULTS
• Price is a complex, yet vital
aspect of offer-response
optimization.
• Often, we are leaving
significant revenue on the
table because we have not
tested and optimized the
presentation of price.
How should price be
presented??

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Today, we are going to walk through the three most
important principles that a marketer should know when
presenting the price of an offer.
TODAY’S FOCUS

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PRINCIPLE #1:
Price Does Not Equal Cost

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Key Principles
PRICE DOES NOT EQUAL COST
1. It is essential that marketers do not confuse price with cost.
Price may be the least part of the cost.
2. Cost does not exist on the web page (or in a product’s price),
cost exists in the mind of the customer. Many elements other
than price can contribute to cost.

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PRICE DOES NOT EQUAL COST
Price + (X) + (Y) + (Z)… = Cost
Confusion Effort Fear
Psychological Costs

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OTHER CONTRIBUTORS TO COST
Other contributors to cost:
Confusion
• Headline “Go Pro” is disorienting. What does it
mean?
• Competing information makes it confusing to
know what is important.
Effort
• The difficulty in reading the white on black
text.
• Layout presents multiple calls-to-actions
Fear
• Is this software simple or will it difficult to
understand?
• Does it have all the functionality I want?

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Key Principles
PRICE DOES NOT EQUAL COST
1. It is essential that marketers do not confuse price with cost. Price
may be the least part of the cost.
2. Cost does not exist on the web page (or in a product’s price), cost
exists in the mind of the customer. Many elements other than price
can contribute to cost.
3. The goal of the marketer is to minimize (not eliminate) as much
non-price specific costs as possible.

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• Exclusive discount code:
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PRINCIPLE #2:
Price can be either P+ or P-

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PRICE CAN BE A EITHER P+ OR P-
Perceived
Positive
Perceived
Negative

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Background: Well-known B2C company offering an online encyclopedia
subscription product
Goal: To get visitors to sign up for a free trial
Primary research question: Which landing page will have the highest
subscription rate?
Test Design: A/B split test (variable cluster)
Experiment ID: Encyclopedia Britannica
Location: MarketingExperiments Research Library
Research Notes:

EXPERIMENT: BACKGROUND

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EXPERIMENT: CONTROL
Let’s look at how
price is presented
in the control…

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EXPERIMENT: CONTROL
• On the original landing page price is NOT presented until they decide to click
through to the next step.
Top of Page

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EXPERIMENT: CONTROL
• On the original landing page price is NOT presented until they decide to click
through to the next step.
Bottom of Page

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EXPERIMENT: CONTROL
Page #2
• Price is presented in the cart. It is presented in a standard way and is mostly
perceived as a negative. Is there a way to present the price so that it is
perceived as a strong positive?

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EXPERIMENT: TREATMENT
Let’s look at how
price is presented
in the treatment…

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EXPERIMENT: TREATMENT
• Top of the landing page has been optimized to better express the value of the
offer. By intensifying the value, our researchers hypothesized that we could
present the price earlier in the process.
Top of Page

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EXPERIMENT: TREATMENT
Bottom of Page
• The price has been moved from the second page to the first page, and it is
presented in such a way that it is actually a perceived value. It states that this
price enables you to “Save $1,251.60 off the print [version]”

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EXPERIMENT: SIDE-BY-SIDE
Control – Page #2
Treatment – Page #1
• Price revealed negatively
on the second page
• Price revealed positively
on the first page

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Versions CR Rel. diff Stat. Conf
Control 1.00% - -
Treatment 2.03% 103%
103% Increase in Conversion
The Treatment generated 103% more free trial sign ups than the control
 What you need to understand: By intensifying the perceived value of not
only the offer, but even its price, the treatment was able to double the
conversion on the page.
EXPERIMENT: RESULTS
95%

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Not this
But this
NOT THIS, BUT THIS

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When Should You Reveal Price??
KEY QUESTION
Sooner? Later?

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WHEN SHOULD YOU REVEAL PRICE?
Key Principles
1. In most cases, price should be presented only when the value is established
and the fulcrum is fully weighted on the value side. It is essential that the value
must be conceptualized, imagined, and fully appreciated prior to revealing the
price.
2. However, our research also suggests that in some cases delaying the
presentation of price can actually create anxiety – particularly in industries
where people expect to see the price up front. People fear they are being
manipulated.
3. The key is to understand how price impacts the variables in the thought
sequence.

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PRINCIPLE #3:
Price Must be Tested

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EXPERIMENT: BACKGROUND
Experiment ID: (Protected)
Location: MECLABS Research Library
Test Protocol Number: TP1154
Background: National Alert Registry was a subscription service that offered
alerts when convicted sexual offenders moved into your neighborhood or
nearby.
Goal: To increase the total revenue generated by the subscription
Primary Research Question: Which price point will generate the highest
revenue?
Approach: A/B split test
Research Notes:

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The only change on the page was the
price of the activation fee.
The three price points tested were:
• $10.00
• $12.50
• $14.95
EXPERIMENT: TREATMENTS
Control Price-Point: $10

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Which price point will generate the most revenue??
Price Point Total Sales Total Revenue
$10.00 ? ?
$12.50 ? ?
$14.95 ? ?
TEST YOUR MARKETING INTUITION

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Price Point Total Sales Total Revenue
$10.00 156 $1,560.00
$12.50 94 $1,175.00
$14.95 74 $1,106.30
EXPERIMENT: RESULTS
33% Increase in Revenue with the Cheapest Price
The control price-point of $10 generated at least 33% more revenue.
What you need to understand: The less expensive price
generated 33% more revenue than the next expensive price and
41% more revenue than the highest price. Essentially, the more
expensive we made the product, the less revenue we generated.


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Price Point Total Sales Total Revenue
$10.00 156 $1,560.00
$12.50 94 $1,175.00
$14.95 74 $1,106.30
EXPERIMENT: RESULTS (A CLOSER LOOK)
33% Increase in Revenue with the Cheapest Price
The control price-point of $10 generated at least 33% more revenue.
What you need to understand: The less expensive price
generated 33% more revenue than the next expensive price and
41% more revenue than the highest price. Essentially, the more
expensive we made the product, the less revenue we generated.


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EXPERIMENT: RESULTS (A CLOSER LOOK)
Control Price-Point: $10
• The results are even more interesting as we
factor in the add-on option to subscribe to
the monthly reporting service.
• More people were likely to subscribe to the
add-on option at the $10 price point, leading
to an even greater revenue increase – exactly
$247,233.94 per year.

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Price Point Marketing Cost Total Revenue ROI
$10.00 $808.02 $1,560.00 93.06%
$12.50 $808.02 $1,175.00 45.42%
$14.95 $808.02 $1,106.30 36.91%
EXPERIMENT: RESULTS (ROI ANALYSIS)
93% Return on Investment
The control price-point of $10 generated a 93% ROI
What you need to understand: The less expensive price
generated more than double the amount of ROI for the marketing
campaign.


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Key Principles
1. Presenting price is part science and part alchemy.
2. Company value is generated by maximizing the gap between
your price to deliver and the customer’s willingness to pay.
3. You cannot know that you have the right price until you have
run an experiment where you have charged too much (and
thus discovered the top threshold of “willingness to pay”).
Price Must be Tested

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AmountSold
Price
THE PRICE FRONTIER GRAPH

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SUMMARY
PRINCIPLE #3: Price Must be Tested
PRINCIPLE #2: Price can be either P+ or P-
PRINCIPLE #1: Price Does Not Equal Cost
It is essential that marketers do not confuse price with cost. Cost does not
exist on the web page, cost exists in the mind of the customer.
Price should be presented only when the value is established and the fulcrum
is fully weighted on the value side. It is essential that the value must be
conceptualized, imagined, and fully appreciated prior to revealing the price.
Presenting price is part science and part alchemy. You cannot know that you
have the right price until you have run an experiment where you have
charged too much.

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Live Optimization

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