What prices do you test? How do you know where to start?
We start with your price. Let’s say you charge $30. We would start testing $25, $30 and $35 with different shoppers. Some shoppers will spend more at $25, others at $30 and others still at $35. You don’t know until you start testing. We measure the impact of different prices by dividing traffic by total revenue the price produced. And we always compare the effect of dynamic pricing with a baseline (we send a % of your traffic to your original price). Over time we find other prices to test that maybe higher or lower. We set a floor price with you (ex. $20) that we would not go below and a ceiling price (ex. $70) that we don’t go above. Some clients don’t bother setting a ceiling price. They let the system decide what the top price should be.