The decision by management to start offering multi-tiered pricing to customers, as well as in-stock pricing sparked months of debates. When I received a project that required me to present management with over 35 different ways to present this pricing information to our customers, I realized it was time to stop debating and take it to our customers for the real answer. I sent out two surveys to over 300 users that had signed up for the MyArrow Impact Group and quickly solved the problem before it was time for the UI team to implement the new features.
The first immediate problem identified was the format for offering in-stock pricing:
Question: If Arrow owned inventory that it could offer for a lower price, how would you interpret the following image?
- What price would you expect to pay per part if you were ordering:
- 60 pieces? Correct 39/45 ($1.35)
- 120 pieces? Correct 16/45 ($1.85)
As you can see from the answers, most users understood how this pricing would work for a purchase of 60 pieces, however, as soon as the order jumped outside the quantity range, only 16 of the 45 respondents selected the correct answer. The solution had over 93% correct answers; still not perfect, but much closer.
Now the fun part is how this solution was found. The process was a combination of surveys and competitor research. The majority of Arrow’s main competitors already used multi-tiered pricing on their websites (but not in-stock pricing). I took a look at each of their presentations and used them to customize Arrow’s pricing scheme, which I then took to the customer.
Question 1: In your opinion, which of the following methods best displays products with quantity breaks?
In question 1, I took the most common multi-tiered pricing displays and found that option C had over 78% of the vote. No debates there. I then catered question 2 to whichever option they chose in question 1 (using the most popular answer for this explanation).
Question 2: In your opinion, which of the following methods best displays products with quantity breaks?
As you can see, in question 2, I showed the quantities in that users’ favorite style and introduced alternate methods of displaying all the pricing information. In this scenario, 80% of respondents chose option B.
For the 3rd and final question regarding display of multi-tiered pricing, I wanted to find out if availability or pricing was more important to the users.
Question 3: In your opinion, which layout provides the best information for making your purchasing decision?
67% of users selected A as the preferred display helping them to their purchasing decision. The multi-tiered pricing project was a resounding success, providing very solid data from users surveyed as to how this information should be presented.
So why all this work for one simple display of pricing? Simple! This is where sales are made. Pricing is displayed in the search results, in a bill of materials, on 3rd party websites, and most importantly, in the cart where the purchase is made. In the example above, if only 35% of users even understand what they will be charged for a purchase, how many of them will still want to go through with it? The power of the data collected in this project is enough to assure management that there will be a solid return on investment.
To solidify the reasoning for multi-tiered pricing, additional questions were asked:
Would seeing a price difference on the next highest quantity break lead you to increase your quantity for that part?
How important is it to know quantity breaks when buying components?
It seems that even though this type of pricing may not lead to more sales, in a competitive market where other companies are offering this service, users have grown to expect it.
This is an example of validating the need and usefulness of a value added service. View the risk management UX project post for an example of when to kill a project.