The Van Westendorp Price Sensitivity Meter (PSM) asks respondents 4 intuitive open-ended questions: At what price is the product Too Cheap, Cheap / Bargain, Expensive, and Too Expensive? Plotting cumulative distribution curves reveals the Acceptable Price Range (from Point of Marginal Cheapness to Point of Marginal Expensiveness) and the Optimal Price Point (OPP).
Van Westendorp Price Sensitivity Curves
Cumulative distribution intersections defining the Acceptable Price Range ($45 – $85) and Optimal Price Point ($62):
• Too Cheap• Cheap / Good Value• Expensive• Too Expensive
Key Capabilities & Benefits
Identifies the: Identifies the acceptable price range without biasing respondents with fixed price lists
Pinpoints the: Pinpoints the Optimal Price Point (OPP) and Indifference Price Point (IPP)
Reveals quality-doubt: Reveals quality-doubt thresholds where customers fear low quality due to low price
Can be: Can be augmented with Newton-Miller-Smith purchase intent extension
When to Use This Method
Early-stage exploratory pricing for brand-new concepts
Validating whether an existing price range aligns with customer value perception
Defining psychological pricing boundaries for premium vs value tiers
B2B and SaaS tier pricing validation
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