Your prices signal the value you offer, drive your revenue, and reveal how well you understand your customers. Testing your prices can be a powerful way to shape your business growth, but some companies treat pricing like a one-off decision instead of something to continually refine. There’s a strong market for companies that do want to invest in testing: the global A/B testing tools market was valued at $850.2 million in 2024.

Below, we’ll explain how price testing works, which methods deliver real insight, and how to turn experiments into pricing strategies that scale.

What’s in this article?

• What is price testing?
  
• Why is testing your prices important for revenue growth?
  
• What are some effective price testing methods?
  
• How do you run and measure a pricing experiment?
  
• How do you analyze price testing results and track metrics?
  
• How Stripe Billing can help
  

What is price testing?

Price testing is the process of running controlled experiments to find the price that makes sense for your customers and your profit. To do this, you show different prices or pricing models to different groups and measure how many people buy, how much revenue you earn, and how customer behavior shifts.

With flexible pricing systems and a wide reach, digital businesses can test and adjust prices quickly across regions and customer segments. When it’s done right, price testing serves as an informative conversation with the market about what your product is truly worth.

Why is testing your prices important for revenue growth?

Pricing can be one of the fastest ways to change your revenue trajectory.

Here’s why:

• It’s one of the strongest levers for profit: Even a small improvement in pricing strategy can increase profit. Few other changes deliver such a clear, immediate impact.

• Guessing costs money: Without testing, you risk underpricing, which misses out on revenue, or overpricing, which deters customers who might have bought at a lower price point.

• It compounds over time: For digital businesses with subscriptions or repeat transactions, every small price optimization multiplies through long-term value and recurring revenue.

• Markets change faster than pricing models: A great price from last year might be eroding your margins today. Continuous testing keeps your pricing in sync with real-world conditions.

• It validates change safely: When you’re rolling out new pricing models, entering new markets, or launching new products, testing gives you proof before full rollout.

What are some effective price testing methods?

Price testing can be a single event (e.g., before a product launch) or an ongoing process. Continuous testing, even with small experiments, can help businesses stay aligned with shifting markets and capture new pricing opportunities before competitors do.

Effective approaches combine experimentation and research, allowing you to see how people really behave and how they respond to price changes.

Here are the different types of price testing methods.

Actual behavior

• A/B price testing: Split your audience into two or more groups, show each a different price, and track how that affects conversions and revenue. When it’s designed well (with the same product and same conditions, but a different price), A/B testing can give you deep insight into buying behavior. Doing A/B testing only with new customers or specific regions can help avoid fairness issues, if people compare notes.

• Split testing: Offer separate landing pages or distinct experiences for each price point. It’s the same idea of measuring which price drives better results, as in A/B testing, but it’s executed through different URLs or site versions.

• Price elasticity testing: Raise or lower prices incrementally and observe how sales volume responds. This measures “elasticity,” or how sensitive demand is to price changes. Elasticity testing can also use historical data if you’ve changed prices in the past.

Survey-based pricing research

• Van Westendorp Price Sensitivity Meter: Ask when a product feels too cheap, is getting expensive, is too expensive, or is a bargain. This aims to define a price range that customers find acceptable.

• Gabor-Granger technique: Show escalating prices and ask respondents whether they would buy at each one to identify maximum willingness to pay.

• Conjoint analysis: Present trade-offs between different product and price combinations to reveal how customers value features relative to cost.

• Monadic testing: Show each respondent only one price, which mimics a real purchase decision and helps isolate true intent.

• Brand price trade-off: Test how customers weigh brand strength against lower prices from alternatives.

How do you run and measure a pricing experiment?

Running a pricing experiment properly can tell you important information about customer behavior.

Here’s what that looks like in practice:

• Be specific about what you’re testing and why. For example, “Lowering the monthly price by 10% will increase conversions by at least 15%.” A sharp hypothesis helps focus your experiment and clarifies its potential success.

• Pick one pricing variable, such as a price point, tier, or discount structure. Keep all other factors identical so you can isolate its impact. Avoid testing multiple changes at once, or you won’t know what generated the result.

• Randomly segment your audience into comparable groups. The control group sees your current price, and the test group sees the new one. This often means splitting website visitors or new sign-ups.

• Run the test long enough, with enough customers, to gather statistically meaningful data.

• Manage consistency through your pricing system. Tools like Stripe Billing make it easier to assign customers to specific price points and ensure they see consistent pricing from checkout to invoice.

• Document what you learn throughout the setup, results, and interpretation. Each test builds institutional knowledge and makes the next one faster and smarter.

How do you analyze price testing results and track metrics?

When a pricing test concludes, the value comes from how you interpret the data. Here’s how to understand the patterns behind the numbers.

Validate statistical confidence

Ensure your results are reliable before you act on them. Use standard confidence thresholds to see whether the performance gap between prices is meaningful. Small samples can mislead. So if your test doesn’t meet the threshold, keep collecting data.

Track the right success metrics

Don’t let vanity metrics distract you. Many important measures are tied directly to revenue and business health.

Monitor the following:

• Conversion rate: This shows immediate demand impact but doesn’t tell the whole story.

• Average revenue per user or order value: This balances conversion and price to show total revenue impact.

• Monthly or annual recurring revenue: This tracks how pricing changes affect steady-state growth for subscriptions.

• Customer lifetime value: This captures whether your pricing supports long-term profitability.

• Churn and retention: This indicates whether a price change makes customers more likely to leave.

• Customer acquisition cost: This reveals how price shifts affect marketing efficiency and payback periods.

Segment your analysis

Look beyond overall averages. Compare performance across customer types, geographies, or pricing tiers. You might find one group is far more price-sensitive than another, which can open the door to regional or segment-based pricing strategies.

Observe short-term and long-term signals

Some prices boost revenue in the short term but reduce retention over time. Track what happens after the sale (e.g., usage, upgrades, cancellations) to see the full effect.

Include qualitative feedback

Numbers don’t tell the whole story. Listen to support tickets, survey comments, and net promoter score shifts. If customers start calling your price unfair, that’s a signal worth tracking alongside the metrics.

Decide, document, and adapt

Once you’ve confirmed the results, roll out what worked or design a follow-up test if you’re unsure. Record your findings so each test builds on the last, and you can make pricing a disciplined, ongoing learning process.

How Stripe Billing can help

Stripe Billing lets you bill and manage customers however you want—from simple recurring billing to usage-based billing and sales-negotiated contracts. Start accepting recurring payments globally in minutes—no code required—or build a custom integration using the application programming interface (API).

Stripe Billing can help you:

• Offer flexible pricing: Respond to user demand faster with flexible pricing models, including usage-based, tiered, flat-fee plus overage, and more. Support for coupons, free trials, proration, and add-ons is built in.

• Expand globally: Increase conversion by offering customers’ preferred payment methods. Stripe supports 100+ local payment methods and 130+ currencies.

• Increase revenue and reduce churn: Improve revenue capture and reduce involuntary churn with Smart Retries and recovery workflow automations. Stripe recovery tools helped users recover over $6.5 billion in revenue in 2024.

• Boost efficiency: Use Stripe’s modular tax, revenue reporting, and data tools to consolidate multiple revenue systems into one. Easily integrate with third-party software.

Learn more about Stripe Billing, or get started today.