Pricing research has a reputation for taking a quarter. Most of that time is recruiting. Once you can ask a thousand people in an hour, the method itself is short, and the oldest one still works best.
The four questions
Van Westendorp's price sensitivity meter asks each person four things about the product in front of them: at what price it becomes too cheap to trust, at what price it is a bargain, at what price it starts to feel expensive, and at what price it is too expensive to consider. Plot the four curves and the points where they cross bound the range the market will accept.
Run it in a morning
- Describe the buyer. Not your whole market, the person who signs. For a team tool, the manager who approves the seat.
- Show the product the way a buyer would meet it: the landing page, the one-paragraph pitch, the pack shot.
- Ask the four questions of a thousand digital respondents built on that buyer. Read the curves. You have a range by ten.
- Interview twelve real buyers on the same four questions before lunch. The interviewer follows up on every answer, so you also learn what the price is being compared with.
- If the twelve land inside the range, you are done. If they do not, the model has not seen your buyer before, and the interviews are the study.
What to do with the range
The range is where the market will tolerate you, not where you should land. Pick the point inside it that matches your position, then test the two or three packagings that put it there. That is a second morning.
Keep the interviews. The next time you ask this buyer anything, the respondents start from what these twelve people said.