MSRP Optimization

Testing prices at local retailers for MSRP optimization.

Google’s Website Optimizer is a great service. It allows you to test all sorts of things on your website, from whether a red button performs better than a blue one, to which call to action results in the most clicks.

Too bad there’s no MSRP Optimizer service.

Until there is, here’s a way publishers can test which price to put on a new release. Let’s say you have five game stores within an hour of your home:

Step 1: Print 25 copies of your game.

Step 2: Break the copies into five equal groups, with five copies in each group.

Step 3: Put a different price sticker on each group, but keep the price in each group the same.

Step 4: Convince those five retailers to let you put your game in their store on consignment.

Step 5: Place one group of game books with each game store so that the price at each store is different.

Step 6: Monitor sales volume for a couple months.

Now, there are obvious flaws with this method. One store may have twice as many customers as another, throwing off your calculations. One store may give better product placement than another, further making it hard to compare results. Also, there’s the cost to drive to multiple locations, convince multiple retailers to play ball, etc.

An easier method involves the same consignment relationship, but you only use one store. With this arrangement, though, you will not put your game on the shelf. Instead…

* Run demonstrations of your game at the store.

* Make sure you never run a demonstration for the same person twice.

* Offer to sell the game to the people you demo it for (but make sure to give the retailer notice, and give them a portion of each sale).

* Change the price each time you make your sale offer.

If you demo your game a half-dozen times at each test price, you should have a nice data set from which to get an optimized price.

The key in both cases is that you’re not asking people what they would pay, you’re asking them to buy. There is no substitute for someone parting with their money. It is the best way to test whether a price is fitting – and whether your game is attractive.

Besides, you get practice demonstrating it to customers. As a publisher, you’ll be doing this a lot…

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