Van Westendorp price sensitivity meter has been helping companies build product pricing strategies since 1976. Essentially, it’s a chart showing the optimal pricing point that will maximize potential revenue from a given product. To create the chart, you’ll need to ask your customers 4 questions and then analyze their responses.
Those questions are:
At what price would you begin to think the product is too expensive to consider?
At what price would you begin to think the product is so inexpensive that you would question the quality and not consider it?
At what price would you begin to think the product is getting expensive, but you still might consider it?
At what price would you think the product is a bargain – a great buy for the money?
When you’re planning to introduce a new product or a new product category, the Van Westendorp meter is invaluable. It helps you eliminate the guesswork and make data-driven decisions about pricing.
To run a Van Westendorp price sensitivity analysis, you can customize a multi-page online survey form and publish it on your website or in your cloud app. Keep reading to see how easily you can do that using Getsitecontrol survey form builder.
Here is how to implement the price sensitivity meter on your website
Getsitecontrol will help you put the Van Westendorp pricing questions together into a neat-looking survey, publish it on select webpages, and analyze the results. In the end, you should be able to draw a graph showing you a pricing range your customers consider acceptable and the optimal price tag for your product.
Before you start building the survey, you should decide whether you want to ask open-ended questions or provide respondents with options. While the original idea seems to suggest the former, some studies show examples where responses are pre-defined. Compare the following variations:
At what price is the product so inexpensive you doubt its quality?
At what price is the product so inexpensive you doubt its quality?
Although Getsitecontrol allows you to implement both methods, we’ll focus on the latter because it is much easier to analyze. Besides, chances are that you already have a range in mind: all you need is to narrow it down and select the perfect price.
Below, we’ll walk you through the process of conducting the Van Westendorp survey step-by-step.
Step 1. Select a survey position on a webpage
Once you’ve registered an account and installed Getsitecontrol to your website, you’re ready to create forms and popups. Open the dashboard and click Create widget, then select Conduct survey. Leave the default template selected and choose your survey position on a webpage – a modal popup, a slide-in, a floating bar, or a panel. Click Next.
Step 2. Create a multi-page survey and adjust its design
On the Design screen, open the Content tab and use the + button to add 3 more pages to the survey. They all will look identical at first – you can customize them later.
Now, let’s start with the first survey page and the first question. Type a brief title and add the full question to the description field. The response fields are already set up as radio buttons, so you just need to add price values. Use the Edit link in the Fields menu to do that.
Finally, change the button copy to Next or Submit.
If you want to alter the style of the form, go to the Appearance tab. Here, you’ll be able to select an image from the gallery or your PC, change its position, precisely adjust the dimensions and the colors of the form.
Use the mobile device preview button to ensure the design will work for smaller screens, too.
In the same manner, design the rest three pages of the survey by adding the remaining questions suggested by Van Westendorp.
Step 3. Add a form submission success page and a welcome page
Page #5, the last page in your survey, is called form submission success page. It’s typically used to thank respondents for participating and encourage further action. For instance, if you’re running this survey to figure out the best price for a new product, you may suggest subscribing for the launch notification. Simply add a new field with an email placeholder and adjust the copy.
By default, when a user clicks on the button, the next survey page opens. But for the last page, you probably want the widget to close upon button click. To do that, go to the Actions tab and change the Primary button action settings.
In the same manner, you can add a welcome page that will appear before the questions. It comes in handy if you want to proactively invite website visitors to participate in your survey or provide more context about the product.
How to analyze the results of the Van Westendorp price model survey
Once you feel you’ve received a sufficient number of responses, it’s time for analysis.
Getsitecontrol generates real-time reports showing how many people have chosen each option on each survey page. To access the report, open Statistics on the dashboard and click on Responses. Here is what it will look like:
Next, you have two options:
- Manually add the data to an Excel spreadsheet and build a line chart based on the results.
- Download all the responses in a .xlsx file, build a pivot table to calculate the percentage of responses for each price, and build a chart based on the pivot table results.
No matter which method you choose, you should be able to draw a chart looking similar to the one below. It defines an acceptable price range and shows you the optimal price point.
In this chart, the acceptable price range is $14.25-$16, and the optimal price point is $14.49
Van Westendorp’s model defines three more points you should take into consideration. Here they are:
The point of marginal cheapness is the intersection of the “Expensive” and the “Too cheap” graphs. In this chart, it is $14.25. That means people aren’t likely to make a purchase at this point and below because of the quality doubts.
The point of marginal expensiveness - the intersection of the “Too expensive” and the “Bargain” graphs - is $16. At this point and above, more sales will be lost because customers feel the product isn’t worth the money.
Finally, the point where the “Expensive” and the “Bargain” lines cross each other is called the point of price indifference. In the chart above, that point will be $15.49. This is where most are indifferent to the price. In other words, approximately the same percentage of customers start thinking the price is getting too low for a good-quality product as those who believe the product is getting too expensive.
The Van Westendorp Price Sensitivity Meter is one of the easiest ways to perform market research when it comes to pricing strategy. It allows you to precisely estimate acceptable pricing based on your customers’ direct responses. It also shows you the points where you may lose sales because the price will outweigh the quality of the product by being too high or too low.
Planning to try the Van Westendorp pricing meter on your website? Make sure your respondents are well aware of the context or familiar with the product - otherwise you risk collecting inaccurate data. One way to ensure you target the right group of people is by showing the survey on select pages or to select audience. A brief guide to using targeting popups in Getsitecontrol will help you with that.