Ask Teresa: How Can You Test a Customer’s Willingness to Pay? - Product Talk

Value pricing - Determine the Willingness to pay. How much money users are willing to pay for the product or service. Competitive pricing - Explore the pricing from competition for a similar product or service. Then decide the pricing based on your product’s positioning. Experimental pricing - Experiment with different price points and correl

4 types of Pricing studies

Study: Van Westendorp Method with steps:

1. Ask price considered "too low"

2. Ask price considered a "bargain"

3. Ask price considered "expensive"

4. Ask price considered "too expensive" Drawbacks: Hypothetical bias, not frequently used by companies or academics, open-ended questions can lead to inaccurate results When to use: Frequently

Ask questions like “Do you value these products/features?” and then ask why. Then switch gears to ask questions like “What would you consider an acceptable price?” Switching from value to price is an easier transition to make in determining customer WTP.