How A/B Tests Can Be Used to Increase IAP Revenue

June 16, 2016

Evan FP

For first time publishers, deciding what to charge for your IAPs is often an intuitive decision rather than a rational one. Should the cheapest IAP in your app cost $1.99 or $4.99? Will the drop in conversions ultimately matter against the increase in revenue? Does a higher price necessarily have to result in fewer conversions? Without data, any answers to these questions are strictly hypothetical.

As of the latest update to our User Experience Management tools, Upsight customers can now run A/B tests to discover the optimal price point for every IAP (among other things) that results in the maximum amount of revenue per customer. A/B testing affords digital marketers and product managers limitless options for experimenting with changes to their implementation at minimal risk to revenue. In our years of experience helping our customers understand and act on user behaviour, we’ve found that the first A/B test any app publisher should be running is a price point sensitivity test.

Here’s how it works: register unique entries for every IAP at each pricing tier you’d like to test in iTunes Connect, Google Play, or whatever platform you use to publish your apps. Next, code your app to leverage the managed variables delivered by Upsight’s User Experience Management tools to switch between which IAPs are made available to users in your digital storefront. Finally, decide how many test variants to use, what percentage of users to allott per variant, and which prices each variant will be exposed to.

Once activated, Upsight will tag the behaviours of each user with their associated variant ID, allowing for detailed analysis of your test’s results. When the data starts rolling in, keep in mind that you’re checking to see which variant produces the highest overall revenue, not just conversions. Also, be sure to let the test run for an appropriate amount of time. We often suggest starting with the average number of days it takes for users to make their first IAP, but the longer a test runs, the more accurate it will be. Once a clear winner has emerged, push the variant’s values to your entire player base and watch your KPIs climb!

We’ll be taking a closer look at other high-value A/B tests in the future, so stay tuned. To get started with your own price point sensitivity test, book a demo or contact your customer success manager today.

In: Product, Marketing

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