# Annual plan cut from $69.95 to $50: +19% subs but -15% revenue

- Outcome: Lost
- Page type: Pricing page (SaaS)
- Elements: Price
- Date shared: 2008-02
- Test run by: [MarketingExperiments](https://liftarchive.com/practitioners/marketingexperiments/)
- Commentary by: LiftArchive (our analysis, not theirs)
- Original source: https://marketingexperiments.com/value-proposition/finding-ideal-price-points
- Page: https://liftarchive.com/test/me-reference-publisher-price-50/

Cutting an annual subscription from $69.95 to $50 brought in more paid subscribers (183 to 218) but lowered total revenue from $12,800.85 to $10,900, about 15% less. MarketingExperiments (MECLABS) ran this two-week, five-way price test for an online reference book publisher. Revenue was the main goal, so the lower price counts as a loss.

## Result

**+19% subs but -15% revenue**

- Paid subscriptions: 183 vs 218, and conversion rose from 0.48% to 0.57%. That is a gain on volume.
- Total revenue: $12,800.85 vs $10,900.00, about 15% lower. A loss on the main metric.
- Across all five prices, $75 earned the most ($13,575) and $79.95 earned less than $75.

## Control

The offer page sold unlimited annual access at $69.95 a year, alongside the saving versus the print edition.

## Variant

The same offer page at $50.00 a year, with the savings figure updated to match. Nothing else changed.

## Why it likely lost (our reading)

- The price cut was about 29%, but subscriptions rose only about 19%, so each lost dollar was not made up by volume.
- Demand looked fairly insensitive to price in this range, so a lower price mostly gave money away.
- Visitors arriving from a reference article likely valued the research access more than the exact price.

## Caveats

The test ran for two weeks in 2008, with 20% of traffic per price and no confidence level shared. Revenue counts only first-year fees, not renewals or lifetime value.

## How to run this test

- Hypothesis: If we lower our annual plan price, then total revenue will rise because more visitors subscribe, provided the gain in sign-ups is larger than the price cut.
- Primary metric: Revenue per visitor to the pricing or offer page
- Guardrail: Paid conversion rate
- Guardrail: Renewal or retention rate
- Guardrail: Refund rate
- Who should test it: SaaS and subscription businesses unsure whether they are priced too high. Test several price points, both up and down, at the same time; a single cut can mislead you when demand is not very sensitive to price.

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Credit: MarketingExperiments ran this test and owns the result. Summary and commentary by LiftArchive (https://liftarchive.com/test/me-reference-publisher-price-50/).
Usage: Free to use, quote and build on, with credit and a link: name the practitioner or organization that ran the test and link to its LiftArchive page. The results belong to the practitioners who ran and shared them; the summaries and commentary are LiftArchive's.