So, I just saw several nice talks about A/B testing, one of which was by our very own patio11.
And the way A/B testing works is that you have to take the data. Hypotheses are just hypotheses. They can be wrong! They can be really wrong! The data will surprise you sooner or later.
Here's a hypothesis: If you put up this chart instead of the one that is there:
2GB: $9.95 per month
100GB: $19.95 per month
200GB plus Teams: $13.25 per month per user, min 5 users
Here is what might happen:
A. On the margin, people with very small companies will tend to buy more Teams subscriptions.
B. However, that effect may be partially canceled out by the large companies that are subliminally turned off by a page that mentions only monthly pricing, not other kinds of pricing. Monthly pricing is great for individuals with credit cards, but company purchasing departments can work... differently. It might in fact be much easier to buy a year at a time than a month at a time just because of the administrative overhead and the culture of purchasing departments, and you'll absolutely have to use purchase orders and invoicing and get approvals, and if the vendor isn't set up for such a thing the whole process will be a huge ball of red tape, and gosh look at the time let's go out for lunch and talk about Dropbox tomorrow, or maybe next month...
C. Meanwhile, some of your potential 100GB customers will be furious that they are being charged so much money! They will stomp their feet and emit furious tweets and threaten to hold their breaths until they turn blue unless they get the $13.25 price.
D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts.
...and thus I wouldn't be too surprised if the results of A/B testing say: Leave the pricing page as it is.
...or, maybe Dropbox didn't actually test this page, and the more-straightforward hypothesis is actually the one that is right, and they could make even more money by switching to all-monthly pricing. ;)
> D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts.
Wow, this is actually a great idea. I should do this with my friends.
Having a seemingly higher price might actually also make big businesses take a look at it more seriously. At something like $13 a month it's easy to overlook and aim for something that appears seemingly more big business ready.
And the way A/B testing works is that you have to take the data. Hypotheses are just hypotheses. They can be wrong! They can be really wrong! The data will surprise you sooner or later.
Here's a hypothesis: If you put up this chart instead of the one that is there:
Here is what might happen:A. On the margin, people with very small companies will tend to buy more Teams subscriptions.
B. However, that effect may be partially canceled out by the large companies that are subliminally turned off by a page that mentions only monthly pricing, not other kinds of pricing. Monthly pricing is great for individuals with credit cards, but company purchasing departments can work... differently. It might in fact be much easier to buy a year at a time than a month at a time just because of the administrative overhead and the culture of purchasing departments, and you'll absolutely have to use purchase orders and invoicing and get approvals, and if the vendor isn't set up for such a thing the whole process will be a huge ball of red tape, and gosh look at the time let's go out for lunch and talk about Dropbox tomorrow, or maybe next month...
C. Meanwhile, some of your potential 100GB customers will be furious that they are being charged so much money! They will stomp their feet and emit furious tweets and threaten to hold their breaths until they turn blue unless they get the $13.25 price.
D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts.
...and thus I wouldn't be too surprised if the results of A/B testing say: Leave the pricing page as it is.
...or, maybe Dropbox didn't actually test this page, and the more-straightforward hypothesis is actually the one that is right, and they could make even more money by switching to all-monthly pricing. ;)