How much to charge: running a Van Westendorp pricing survey

“How much should I charge?” is one of the hardest questions for any business. Charge too little and you leave money on the table, and sometimes signal low quality. Charge too much and people won't even consider it. Many businesses end up copying a competitor's price or adding a margin on top of cost, without knowing what their customers think.

The Van Westendorp method, also called the price sensitivity meter, is a simple way to ask your customers which price feels reasonable. It won't give you an exact number, but it gives you a well-grounded range to decide from.

The 4 questions

After describing the product or service clearly, you ask each person these four questions. The answers are amounts, not options:

• At what price would this be so cheap that you'd doubt its quality?
• At what price would it be a good deal, a bargain?
• At what price would it start to feel expensive, though you'd still consider it?
• At what price would it be so expensive that you wouldn't buy it?

The first question surprises people the most, but it's key. A price that's too low also scares customers away, because it creates doubt. This happens a lot with professional services, handmade products, or anything where quality isn't obvious at first sight.

A practical detail: before the questions, describe exactly what's included. “A cooking class” isn't the same as “a 3-hour cooking class for 6 people, ingredients included”. If each person pictures something different, the prices can't be compared.

Who to ask

The method works when you ask people who could actually buy what you sell. Ask just anyone and you'll get prices from people who would never be your customers. Some options:

• Current customers, if you're considering a new product or a price change.
• People who left their details because they were interested in something similar.
• Social media followers or newsletter subscribers, if they match your ideal customer.

On numbers: with few responses the curves come out jagged and it's hard to see where they cross. Aim for a few dozen responses at minimum and, if you can, more than a hundred. If you sell to very different profiles (for example, individuals and businesses), analyze each group separately, because their price ranges can be very different.

How to read the curves

From the answers you build cumulative curves. For each possible price, you work out what percentage of people would find it too cheap, cheap, expensive or too expensive. Where those curves cross, the key points appear:

• Acceptable price range: from the point where almost nobody sees it as too cheap anymore, to the point where many start seeing it as too expensive. Outside that range, you lose customers either to doubt or to price.
• Optimal price point: where the “too cheap” and “too expensive” curves cross. It's the price with the least rejection, because the fewest people rule it out for either reason.
• Indifference point: where the “cheap” and “expensive” curves cross. It's the price that as many people see as a good deal as see as expensive. It often reflects what the market considers a normal price.

Imagine you run the survey for a one-day photography workshop and get these results: an acceptable range from $40 to $85, an optimal price of $55 and an indifference point of $62. That tells you that charging $30 would lose customers to doubt, that charging $100 would shut out lots of people, and that something between $55 and $65 would be a reasonable place to start.

Drawing the curves by hand in a spreadsheet is possible but tedious. There's a free “Van Westendorp calculator” on the site: paste in the answers and it draws the curves and marks the points for you.

Where the method falls short

Van Westendorp is useful, but it's not a crystal ball. Keep in mind what it doesn't do:

• It measures what people say, not what they do. Saying you'd pay $60 isn't the same as taking out your card.
• It doesn't account for competitors directly. People answer based on what they know, but you're not showing them alternatives.
• It doesn't tell you how much you'll sell at each price, only which prices meet the least resistance.
• It works best for products or services people can picture clearly. With something very new, answers can vary a lot.
• If the survey is framed as “we're setting the price”, some people will lowball on purpose. It's better to frame it as a question about perceived value.

Combine it with other data

The survey result is one piece, not the final decision. Before setting the price, put it next to:

• Your costs. If the acceptable range sits below what it costs you to deliver, the problem isn't the price: it's the model.
• The prices of alternatives your customers know.
• What you already know from your sales: what happened when you raised or lowered prices before.
• A real test, if you can. For example, offer the product to a small group at the chosen price and see how many buy.

Used this way, the method saves you plenty of internal debates based on gut feeling and gives you a starting point backed by your own customers' answers.

How to do it with SurvIQ

SurvIQ has a price perception template available from the Basic plan, with the four questions already set up. If you're on the free plan, you can also build it yourself with four number questions, which are included in the free plan. Share it by link, email, WhatsApp or QR code, and people answer from their phone without creating an account. Then take the answers to the Van Westendorp calculator on the site to see the curves.