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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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The Van Westendorp Price Sensitivity Meter is a quantitative research methodology used to find a range of acceptable price points for a product or service. It works by asking respondents a set of four specific questions about pricing perception.
How It Works
The methodology involves surveying potential customers with four key questions to determine:
- At what price would they consider the product/service too expensive?
- At what price would they consider the product/service too cheap?
- At what price would they consider the product/service expensive but still worth purchasing?
- At what price would they consider the product/service a bargain?
By plotting the responses to these questions on a graph, we can identify the optimal price range where customer acceptance is maximized.
When to Use It
The Van Westendorp Price Sensitivity Meter is particularly useful in these scenarios:
- When launching new products or services with limited market pricing data
- When considering price changes for existing offerings
- When entering new markets or segments where price sensitivity may differ
- When testing price elasticity for different features or configurations
- When you need a relatively quick and straightforward pricing assessment
Advantages
This methodology provides valuable insights by:
- Identifying a range of acceptable price points rather than a single number
- Revealing price thresholds that might trigger resistance or perception issues
- Delivering actionable results without requiring complex statistical analysis
- Serving as a foundation for more detailed pricing research
Integration with Our Pricing Strategy
In our pricing methodology, the Van Westendorp technique is categorized as a Statistical/Quantitative research method. It works best when combined with other approaches such as conjoint analysis (for package identification), Max Diff (for feature prioritization), and our unique qualitative validation studies with clients and prospects.
For complex pricing scenarios, we often recommend using Van Westendorp as an initial assessment, followed by more detailed empirical research to analyze your pricing performance across different segments, geographies, and product tiers.