“Which product tiers should we offer?”
Skills used: Consumer Research, Statistics, Business Insights, Strategy
CG Master Academy, an online computer graphics education platform, wanted to understand the potential outcomes of introducing new pricing models. Classes were being offered a rate of $699 per course with one-time access. They were considering adding two new options: a reduced-price option for reduced access and an upcharge for the option to have ongoing access to the course content at its conclusion.
We completed full intakes with the CEO, Head of Marketing, and Head of Student Affairs to develop a targeted survey which included an experiment on pricing. We computed estimated revenue, including estimated student attrition, under 4 experimental pricing models and 1 control model. We ran an analysis of variance and other statistics to identify one program that would significantly increase their revenue.
Rationale for solutions:
An experimental study design was used to establish causality, i.e., which change in pricing would cause a change to revenue? Survey items were also collected to understand market segmentation. Current students, former students, and potential students were included in the study to identify whether changes in the pricing model could potentially attract new types of students.
We identified a pricing model that would increase their topline revenue by more than $27,000 per semester.