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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on our pricing strategy book, Price to Scale, there are several key takeaways when gauging customer price sensitivity:
• Direct Surveys and Structured Techniques:
- Techniques like Van Westendorp analysis can help establish the range of acceptable prices by asking customers where they see prices as “too cheap” (raising doubts about quality) or “too expensive.”
- Conjoint analysis is particularly useful because it goes beyond a single price point. It helps you understand how respondents value different features or bundles, allowing you to see which attributes drive the most value and influence purchase decisions.
- However, the book notes that simply asking how much a customer might pay often produces biased or noisy responses. Providing context and anchoring the customer in a familiar reference (e.g., positioning your product within a known category like CRM) is crucial to get more reliable insights.
• Observing Actual Behavior:
- While surveys and structured techniques offer valuable insights, our book consistently suggests that observing real customer behavior is extremely important. Actual transactions and unprompted feedback (e.g., from demos or support interactions) often reveal more about how the market will truly respond.
- Especially in B2B or enterprise contexts, where survey responses may be less reliable, real behavior under live conditions becomes the most reliable indicator of price sensitivity.
• Combining Methods for a Robust Approach:
- Many founders have found value in using a combination of both survey-based techniques (like Van Westendorp or conjoint analysis) and live market testing. The survey approaches provide a structured framework to understand pricing perceptions, while real-world data—such as conversion rates or customer support feedback—helps validate or adjust those insights.
In summary, our pricing strategy book, Price to Scale, recommends using structured pricing surveys and advanced techniques (such as Van Westendorp and conjoint analysis) to gather initial customer insights, but emphasizes that these should be complemented with observations of actual customer behavior to truly gauge price sensitivity. This integrated approach helps ensure you have both a theoretical and practical understanding to set the right price.