Annual price cut from $69.95 to $59.95: more subs, -8.2% revenue
Test run byMarketingExperimentsResearch publisher
Commentary byLiftArchiveOur analysis, not theirsCutting an annual subscription from $69.95 to $59.95 lifted paid subscriptions from 183 to 196, but total revenue fell 8.2%, from $12,800.85 to $11,750.20. MarketingExperiments (MECLABS) ran this test for an online reference book publisher.
It was one arm of a five-way price test over two weeks.
- Paid subscriptions: 183 to 196 (+7.1%). Conversion to paid went from 0.48% to 0.51%.
- Total revenue: $12,800.85 to $11,750.20 (-8.2%). The extra sign-ups did not make up for the lower price. This is the result that counts as a loss.
- In the same test, $50 sold the most (218) but earned the least ($10,900), and $75 earned the most ($13,575).
- No significance level was reported, and the subscription counts per arm are small.
The change
Only the annual price changed, from $69.95 to $59.95.
Simplified mockup drawn by LiftArchive from the shared screenshots.
Control
The offer page sold a year of unlimited access to the publisher's research for $69.95, with a line showing the saving against the print edition.
Variant
The same page with the price set to $59.95 and the saving line updated to match. Nothing else on the page changed.
Why it likely lost
Our reading of the result, not the practitioner's claim.
- A $10 cut is about 14% off the price, but it only bought about 7% more buyers. Demand at this price range looks fairly insensitive to small cuts.
- Visitors came from a reference article, so they likely already wanted the content. Buyers with high intent care less about price.
- The saving against the print edition was already over $1,300. Another $10 off barely changes how good the deal looks.
Caveats: Two-week test from 2008 with about 200 paid subscriptions per arm and no stated significance. The revenue figures cover first purchases only, not renewals or refunds.
Who ran it
MarketingExperiments ran this test for an online reference book publisher selling annual subscriptions and published the results (MarketingExperiments). The numbers are theirs; the summary and commentary on this page are ours.
Read the original case study on MarketingExperiments →
How to run this test on your site
- Hypothesis
- If we lower the annual subscription price, then paid conversions will rise enough to grow total revenue, because price is the main thing stopping visitors from buying.
- Primary metric
- Revenue per visitor to the offer page
- Guardrails
- Paid conversion rate
- Renewal or retention rate of each price cohort
- Refund rate
- Who should test it
- SaaS and content businesses with one clear paid plan and enough traffic to see a few hundred purchases per arm. Test several price points, both higher and lower. If you only see a handful of sales a week, a price test will not give you a clear answer.
Questions
Does lowering a subscription price increase revenue?
Not always. In this test a $10 cut won more buyers but earned 8.2% less revenue, because the extra buyers did not offset the lower price.
How should I test subscription prices?
Split traffic across several prices above and below the current one, and compare revenue per visitor, not just conversion rate.
Track renewals too, since cheaper plans can change who signs up.
Is conversion rate the right metric for a price test?
No. A lower price almost always converts better.
Revenue per visitor, and ideally lifetime revenue, tells you which price is actually better for the business.