Dynamic SMB Pricing Experiment
Pricing experiments to identify elastic zones and optimize revenue without hurting retention
Situation
SMB plan revenue remained flat despite rising costs. The client needed to increase prices without triggering customer churn.
Task
Run controlled pricing experiments to identify price elasticity zones and optimize revenue without negatively impacting customer retention.
Action
Business & Strategy
Devised market tests in two pilot cities with stratified customer sampling. Created tiered pricing structure linked to perceived value metrics. Collaborated with customer success teams to monitor satisfaction scores.
Technical Implementation
Built Bayesian hierarchical model for price elasticity estimation. Implemented Monte Carlo simulations for risk assessment (10,000+ scenarios). Developed real-time monitoring dashboard for experiment tracking.
Results
Business Impact
Achieved 8.7% sustained revenue lift with stable retention rates. Enabled data-driven pricing decisions across all markets.
Technical Achievement
Reduced pricing decision cycle from 3 weeks to 3 days. Model accuracy: 94% confidence intervals for elasticity estimates.