Need a pricing survey template to help you optimise revenues and profit? We’ve got you covered.
Why is pricing important?
Getting the price right for your product can be the difference between failure and success.
Price your product too high and people won’t buy it, and you’ll lose market share to competitors.
Price your product too low and you're leaving money on the table! Not to mention that it can adversely affect consumer perceptions of your brand and harm profit margins to the point that you’re unable to invest sufficiently in the future.
In other words, pricing is a delicate balance that you have to get just right.
How do you find the optimal price for your product?
“You know you’re priced right when your customers complain—but buy anyway.” – John Harrison, Clockmaker
Nobody wants to pay more than they have to, so it’s hard to establish the right price simply by asking people, isn’t it?
Dutch economist Peter van Westendorp introduced a model, called the Pricing Sensitivity Meter, that’s been in wide use since 1976.
It works by asking four straightforward questions.
- At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
- At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
- At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought tobuying it? (Expensive/High Side)
- At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)
Once you have this data, there’s a handy step-by-step guide (including a downloadable template) to help you interpret the results by
plotting them onto a graph, which will then
show you where there is an ‘optimal price point’ (OPP).
Other pricing considerations
While turning van Westendorp’s Pricing Sensitivity Meter is a great start and will help form a basis for your pricing considerations, it’s important to note that pricing is a complex decision, and not one to be taken lightly.
In fact Wikipedia lists over 26 different pricing strategies that you might want to consider!
Therefore you should take it as one of several data points before making a final product pricing decision.
The Pricing Survey Template
To help you get started, we’ve create a tried-and-tested version of the Pricing Sensitivity Meter, ready and waiting to go. You could have it sent within 5 minutes.
All you need to do is login (or join) Attest, select the Pricing template, enter a couple of details specific to your product, select the audience you want to ask about pricing (we recommend a sample size of 1000), and hit ‘confirm.’
You’ll have reliable pricing data back within a day or so.
If you're about to embark on a consumer intelligence project, get the ins and outs by reading our Complete Guide to Survey Creation.