How to A/B test pricing as a boostrapped company 2025

How to A/B test pricing as a boostrapped company

Want to boost your SaaS revenue without breaking the bank? Start A/B testing your pricing. Even small changes can lead to big results - like a 1% pricing tweak increasing profits by 11.1%. This guide shows you how to test pricing effectively, even with limited resources.

Check out our comprehensive guide: How to Build a SaaS Pricing Strategy That Converts.

Key Takeaways:

• Set Clear Goals: Focus on metrics like ARPU, conversion rates, or churn.
• Start Small: Test one variable at a time (e.g., price points, layouts, or features).
• Use Free Tools: Google Optimize, surveys, or regional tests work well.
• Analyze Results: Track revenue, customer behavior, and long-term effects.
• Roll Out Gradually: Protect existing customers by grandfathering old plans.

Quick Example:

Test adding a $49/month mid-tier plan between $29 and $99. Hypothesize it will boost ARPU by 15% in 60 days. Use free tools to split-test and measure impact.

Pricing experiments don’t need to be costly - start small, measure results, and refine as you go.

Should You Be Running A/B Tests On Price?

1. Define Your Testing Goals

To make the most of your pricing experiments, start by setting clear and measurable goals. This approach ensures you can focus your efforts and resources effectively.

Set Clear Success Metrics

Choose metrics that align with your business objectives. Here are some examples:

Metric Description Target Example

Average Revenue Per User (ARPU) Revenue generated per active customer Increase from $50 to $55 per month

Trial-to-Paid Conversion Rate Percentage of free trials converting to paid plans Improve from 25% to 30%

Customer Lifetime Value (CLV) Total revenue expected from a customer Grow from $1,200 to $1,500

Churn Rate Percentage of customers who cancel Reduce from 5% to 4% monthly

Track these metrics throughout your testing phase to measure the impact of your changes. Once you’ve identified the key metrics, move on to crafting hypotheses that aim to improve them.

Build Test Hypotheses

Follow these steps to create actionable hypotheses for your pricing experiments:

• Start with baseline metrics: Collect data on current performance, such as conversion rates by pricing tier, average order value, customer lifetime value, and revenue per visitor. Set clear objectives: Define specific, measurable goals. For instance:

• Boost ARPU by introducing a premium pricing tier.

• Lower churn by offering flexible payment options.

• Increase conversion rates by simplifying pricing structures.

• Write a hypothesis: Clearly outline the change you’re testing and the expected result. For example:

"By introducing a mid-tier plan at $49/month between our Basic ($29) and Premium ($99) plans, we expect to increase overall ARPU by 15% within 60 days while maintaining current conversion rates."

Use the Jobs To Be Done (JTBD) framework to better understand what your customers need from your product. Think about the functional, emotional, and social "jobs" they’re hiring your product to fulfill.

"Strategic pricing could have a more substantial impact on profitability than any other growth strategy." - Donald Ng, Mida Blog

2. Build Low-Cost Tests

Running affordable pricing tests involves setting up structured experiments to gain clear insights into how customers respond to different pricing strategies.

Check out our comprehensive guide: Freemium vs Premium: Choosing the Right SaaS Model.

Split Test Groups

Divide your audience into separate groups for testing. A simple way to do this is to randomly assign new visitors to different pricing options, while keeping current customers on their existing plans.

Test Group Description Best Practice

Control Group Current pricing structure Allocate 50% of traffic

Variant Group New pricing model Assign 50% of traffic

Existing Users Current customers Keep original pricing

Run these tests for at least two weeks to account for weekly patterns and collect enough data for analysis.

Test Single Changes

Focus on changing one variable at a time to get clear, actionable insights. Key areas to test include:

• Value Communication: Experiment with how value propositions, feature descriptions, or benefit statements are presented, without adjusting the price itself.
• Page Layout: Try different layouts for your pricing page to see if presentation impacts conversion rates, keeping the prices constant.
• Call-to-Action Elements: Change the placement, color, or text of CTAs to evaluate how these tweaks influence purchase decisions, without altering pricing.

Use Free Tools and Methods

You don’t need expensive tools to gather useful data. Here are some cost-effective options:

• Limited Market Testing: Roll out new pricing in specific regions or market segments to test customer reactions with minimal risk. Customer Surveys: Apply the Van Westendorp Price Sensitivity Meter (PSM) to understand price perceptions. Ask questions like:

• At what price would this product feel too expensive?

• At what price would this product feel too cheap?

• At what price would you consider it expensive but still worth buying?

• At what price would it feel like a bargain?

• Feature-Based Testing: Test different feature combinations at the same price points to learn which features customers value most.

These approaches provide a solid foundation for refining your pricing strategy before moving on to the next step.

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3. Choose Testing Tools

Once you've designed low-cost tests, the next step is picking the right tools and metrics to validate your pricing ideas.

Free and Budget-Friendly Tools

Here are some affordable tools that can easily integrate with your systems:

Tool Type Key Features Best For

Google Optimize • Free A/B testing platform
• Direct GA4 integration
• URL-based targeting Testing page layouts

Customer Survey Tools • Price sensitivity analysis
• Van Westendorp PSM
• Qualitative feedback Conducting market research

Regional Landing Pages • Geographic price testing
• Custom URL parameters
• Traffic segmentation Testing in limited markets

After selecting your tools, you’ll need to track key data points to ensure your tests are effective.

Dive deeper into What Is SaaS Price Localization?.

Focus on Key Metrics

The tools and metrics you choose should align with your initial goals. Pay attention to these critical data points to evaluate your pricing tests:

Revenue Metrics

• Total revenue per variant
• Average revenue per user (ARPU)
• Customer lifetime value (CLV)
• Conversion rates at different price points

Customer Behavior

• Time spent on the pricing page
• Click-through rates for pricing tiers
• Abandonment rates
• Support ticket volume related to pricing

Keep in mind that higher conversion rates don’t always mean higher revenue. For instance, if a test shows a 25% conversion rate at $29 per month and a 15% conversion rate at $49 per month, the $29 option would generate $725 per 100 visitors (25 × $29), while the $49 option would bring in $735 per 100 visitors (15 × $49).

To ensure reliable results, run each test for 2–3 weeks, aim for at least 100 conversions per variant, and keep external conditions consistent (avoid testing during major marketing pushes or seasonal events).

If direct price testing is too challenging, start by testing page layouts or value propositions to gather insights you can act on.

Finally, document all test parameters - start and end dates, audience segments, external factors, and any unusual events. This will make future analysis much easier.

4. Review and Apply Results

Check Performance Metrics

After running your tests for 2–3 weeks, it's time to dig into the data. Focus on these key metrics to evaluate how well your experiments performed:

Metric Category Key Indicators Target Goals

Revenue Impact • ARPU changes
• Trial-to-paid conversion Aim for a 1–2% increase

Customer Behavior • Conversion rates
• Churn rates
• Customer lifetime value Track across segments

Long-term Effects • Customer satisfaction
• Retention rates Monitor over time

Breaking down results by customer cohorts can help you understand how different groups respond to pricing changes. Even a small boost - like a 1–2% increase in ARPU - can have a noticeable impact on profitability over time. Let your tests run long enough to factor in seasonal trends and achieve statistically reliable results. Once the data is clear, use it to guide a strategic rollout of your winning approach.

Roll Out Changes

Using insights from your tests, follow these steps to roll out the changes effectively:

Dive deeper into Common SaaS Monetization Problems and Solutions.

Validate Results

• Double-check that external factors, like marketing campaigns or seasonal events, didn’t skew your test results.
• Ensure the testing conditions remained consistent throughout the experiment.

Plan the Rollout

• Create a detailed timeline for updating pricing pages, notifying customers, preparing support teams, and setting up monitoring systems.

Protect Existing Customers

• Maintain trust by grandfathering customers on their current plans.
• Offer upgrade options for those interested in new pricing tiers.
• Provide clear, advance communication about any upcoming changes.

A gradual rollout using geographic segmentation can help minimize risks. Start with smaller markets to test the waters and gather more data before expanding. Post-implementation, keep a close eye on key metrics to confirm the new pricing strategy is performing as intended. Stay alert for any unexpected shifts in customer behavior and adjust as needed.

Tips for Success

Once you've built your A/B testing framework, these strategies can fine-tune your pricing experiments for better results.

Focus on New Customers

Run pricing tests exclusively on new users. Break down your tests by region or acquisition channel to gather more precise insights.

Make sure your pricing reflects clear value. Take Netflix as an example: they moved from offering a single plan to introducing multiple tiers. This allowed them to appeal to various customer groups while maintaining profitability within each tier.

Here are some key factors to consider for value-based pricing:

Factor Impact Action Items

Market Position Brand perception Align pricing with brand quality

Customer Segments Willingness to pay Develop targeted offerings

Feature Access Value delivery Match features to price points

Strong communication during pricing changes is crucial for maintaining trust.

Keep Customers Informed

Be transparent with your customers about pricing changes. Share clear details about what’s changing, emphasize the benefits, and offer support throughout the transition.

For instance, Upwork shifted from a flat 10% fee to a sliding scale by:

• Explaining the advantages of the new structure
• Highlighting how it rewards long-term client relationships
• Giving customers advance notice
• Providing assistance during the adjustment period

Effective communication can ease the transition and help customers see the value in the changes.

Consider Market Conditions

Timing matters when testing pricing. Keep an eye on external factors that could influence customer behavior:

Measure your performance using our pricing calculator.

• Seasonal buying patterns
• Economic conditions in your test regions
• Industry-specific events or shifts

Also, track your internal costs:

• Customer acquisition expenses
• Operational overhead
• Profit margins at different price levels

Spotify’s regional pricing strategy is a great example of adapting to market conditions. They consider factors like:

• Local income levels
• Regional competition
• Cultural preferences
• Market maturity

Conclusion

Summary of Steps

A/B testing your pricing doesn't have to be overwhelming or expensive. By staying organized, setting clear objectives, using affordable tools, and closely monitoring outcomes, you can make the process manageable and effective.

Here's a quick overview of the key phases in pricing experiments:

Testing Phase Key Actions Success Indicators

Planning Define metrics, build hypotheses Clear and measurable goals set

Implementation Test single changes with free tools Smooth and reliable data flow

Analysis Track conversion rates, CLV, ARPU Reliable, clear test results

Iteration Apply findings, plan new tests Consistent testing every quarter

With this structure in place, you're ready to take action and refine your pricing strategy.

Next Steps

To kickstart your pricing optimization process, follow these steps:

Set Up Your First Test: Start with one pricing variable and use free tools like Google Optimize to run your initial test.

Schedule Regular Tests: Plan quarterly tests to gather meaningful data. This approach helps you:

• Account for seasonal trends
• Make data-driven pricing decisions
• Stay adaptable to market shifts

Create an Analysis Framework: Develop a system to dive deep into your results. Focus on understanding why certain changes worked, how different customer segments responded, and what these findings mean for your future strategies.

Pricing optimization is a continuous journey. Each test adds to your knowledge, helping you fine-tune your approach and grow your business effectively over time.

Related reading

• How to Build the Best Marketing Toolkit
• Social media toolkit: Creating one for your organization
• What Is A Brand Toolkit and How You Can Create One?
• What Is Strategy Consulting? (And when to hire a consultant to do it for you)
• Digital Marketing Services

Useful tools & services

• Pricing ROI Calculator - Calculate the revenue impact of improving your pricing page
• A/B Test Sample Size Calculator - Calculate required sample size for pricing experiments
• Revenue Impact Calculator - Calculate revenue impact of conversion improvements
• All Services

Frequently Asked Questions

How should I price my SaaS product?

Price your SaaS product based on value delivered to customers, not just costs. Start by researching competitor pricing, then use value-based pricing: identify your ideal customer's willingness to pay and the ROI your product provides. Test 3-4 pricing tiers (often Good-Better-Best) with 2-3x price jumps between tiers. Plan to iterate pricing based on customer feedback and conversion data.

What's the difference between freemium and free trial?

Freemium offers a permanently free version with limited features, converting users to paid plans for advanced functionality. Free trials give full access for a limited time (typically 7-30 days), after which users must pay or lose access. Freemium works best for high-volume, viral products. Free trials work better for complex B2B products where users need time to see value before committing.

When should I change my pricing?

Consider changing pricing when: 1) Your product adds significant new value, 2) You're expanding to new market segments, 3) Your LTV:CAC ratio is too high (you're underpriced), 4) Churn is low and customers cite pricing as their reason for staying, 5) You're launching a new product tier. Always grandfather existing customers at their current price to maintain trust. Test pricing changes with new customers first.

Should I show pricing on my website?

Yes, for most SaaS products - transparency builds trust and filters unqualified leads. Show pricing if: your deals are under $10k annually, you have a self-service model, or competitors show pricing. Hide pricing only if: you sell complex enterprise solutions requiring customization, your deals exceed $50k+ annually, or you need sales team qualification. When in doubt, test both approaches and measure conversion rates.