Friday, October 2, 2015

Can experimenting with price help you improve your perfume?

    In my post earlier today I discussed how pricing experiments by the Bezos-owned Washington Post could be helping not only to fix the "right" future price for the Post but may also be helping develop the Post itself by adjusting the content, based on reader metrics to shape the right product at the right price.

    If you are a developer and seller of your own perfume, could you use price experiments to help make your perfume more commercial? ("Commercial" is not a dirty word. It just means being able to sell your perfume profitably, which must happen if you hope to have a business.)

    How might price experiments help shape your future perfume offerings? One "discovery" you might achieve is finding the best way to deliver your fragrance. What might be the best bottle size for a fine, alcoholic fragrance? Are you using too big or too small a bottle? Size affects your cost, cost affects your potential retail price range. Is there a sweet spot where cost, price, and bottle size make both you and your customer happy?

Xotic, by Lightyears
Xotic, by Lightyears.
  Would a solid perfume be greeted with more enthusiasm than a liquid perfume? A solid perfume is easier to ship. No problem with "hazardous material" restrictions. No problem with glass bottles that can break or closures that can leak. You can ship internationally with ease and produce your fragrance at a lower cost.

Xotic solid perfume
Xotic solid perfume by Lightyears
    But maybe customers would prefer your fragrance in a soap, or a shampoo, or in a room spray or some sort of diffuser. You might not have the resources to test all of the possibilities but it is helpful, when you are testing, to know that they exist.

    Tests can be difficult to set up. Responses must be adequate to insure statistical significance. But there are secrets in the pricing model that are worth trying to unlock.

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