Determining Optimal Pricing for a Wearable Health Device
A medical device company was developing its flagship product, a wearable health tracker, and wanted to gain a clearer understanding of the optimal pricing structure and price level that was acceptable for their target consumer.
C+R developed a pricing conjoint study to understand optimal pricing structure (base vs. subscription pricing) as well as the features and metrics that would most appeal to consumers.
Need Pricing Structure
Our client, a medical device company, was developing a wearable health device geared toward women and wanted to understand the optimal pricing structure and price level that was acceptable. Recent research with the core consumer target revealed some discomfort with monthly subscription pricing, so they wanted additional insights in this area especially.
Specifically, the company needed to:
- Understand the optimal pricing structure: base price vs. subscription pricing
- Learn what features, metrics, and pricing structures were appealing to their target consumer
- Identify the appropriate price level within the optimal structure
Conjoint with Brand, Features, Prices Inputs
C+R developed an online survey with a conjoint exercise to evaluate different wearables and understand preferences for brands, metrics, features, and prices. Respondents were presented with a series of wearable features from current and future wearables on the market and were asked to choose which connected fitness tracker they would buy.
The exercise was designed to vary the combinations of features, as well as price, shown to respondents in order to understand the impact of these features on interest in the client’s product, as well as the optimal pricing structure to offer.
No Subscription Pricing Maximizes Market Share and Revenue
Our research confirmed that subscription-based pricing was a turn-off to our client’s core consumer base and that both market share and revenue would be maximized without offering a subscription. We also provided the client with a list of which health metrics would have the highest impact on the target market’s decision to purchase their flagship product.
After the study’s completion, the client premiered their product at a prestigious tech conference and won several “Best of” awards. Several trade magazines cited how rare and great it was that the product does not come with a subscription price, a point which C+R was adamant about in our recommendation.