The value of raising prices

Just spoke to an entrepreneur who took the unusual step of increasing monthly prices by 2.5 times approximately. They saw a slight 5% drop in conversion rate. My reaction? You didn't raise prices enough and I encouraged him to do A/B testing to try and get a sense of the demand curve for his service. It's the wonderful thing about web businesses -- you can actually draw out demand curves and really hone one of the hardest challenges in business: setting price!