Willingness to Pay Research: How to Find the Optimal Price

Most SaaS companies set prices based on intuition or copying competitors. The result? Usually they're 30-50% below optimal price. WTP research tells you what customers will actually pay.

Why WTP Research?

Data from ProfitWell shows that companies that systematically research willingness to pay achieve:

• 20-30% higher prices without negative impact on conversions
• Better tier design — right features in right plans
• Lower churn — price matches perceived value

4 Methods for Measuring WTP

1. Van Westendorp Price Sensitivity Meter

The most popular method for quickly determining price range.

4 questions:

1. At what price would the product seem too cheap (you'd doubt quality)?
2. At what price would the product seem like a bargain?
3. At what price would the product seem expensive but you'd still consider buying?
4. At what price would the product seem too expensive?

Results Analysis:

Intersection chart:

• Point of Marginal Cheapness (PMC): Intersection of "too cheap" and "expensive"
• Point of Marginal Expensiveness (PME): Intersection of "too expensive" and "bargain"
• Optimal Price Point (OPP): Intersection of "too cheap" and "too expensive"
• Indifference Price Point (IDP): Intersection of "bargain" and "expensive"

Acceptable price range: PMC → PME

2. Gabor-Granger Technique

For determining price elasticity.

Method:

1. Show product and price
2. Ask: "Would you buy at this price?" (Yes/No)
3. If Yes → raise price and repeat
4. If No → lower price and repeat

Output: Demand curve — how many people would buy at different prices.

3. Conjoint Analysis

The most sophisticated method for complex pricing decisions.

When to use:

• You have multiple pricing dimensions (features, support level, usage limits)
• You need to determine relative value of individual features
• You're designing new tier structure

How it works: Respondents choose between combinations of features and prices. From their choices, the algorithm derives:

• Value of each feature
• Price sensitivity
• Optimal bundle compositions

4. Actual Price Tests (A/B Testing)

Most reliable but riskiest method.

Setup:

1. Split traffic into 2+ groups
2. Show different prices
3. Measure conversion rate and revenue

Important:

• Test on new visitors (not existing customers!)
• Have sufficient sample size
• Consider ethical aspects and legal requirements

Survey Design Best Practices

Do's ✅

• Target the right audience (actual buyers, not random users)
• Provide enough context about the product
• Randomize question order
• Test survey before launching
• Collect segmentation data (company size, role, use case)

Don'ts ❌

• Don't ask "How much would you pay?" (people don't know)
• Don't use leading questions
• Don't test too many prices at once
• Don't ignore segment differences

Sample Size Requirements

Method	Minimum	Ideal
Van Westendorp	100	200+
Gabor-Granger	150	300+
Conjoint	300	500+
A/B testing	1000+ per variant	5000+ per variant

Interpreting and Applying Results

Segmentation is Key

Always analyze results by segments:

• Company size (SMB vs Enterprise)
• Use case
• Seniority
• Geography

You'll often find that different segments have dramatically different WTP.

From WTP to Pricing Strategy

1. Identify segments with high WTP → Enterprise tier
2. Identify features with high perceived value → Premium features
3. Find "deal breaker" features → Must be in base plan
4. Test boundaries — WTP is a range, not a single number

Case Study: SaaS Pricing Research

Situation: B2B SaaS, current pricing $49/99/199

Van Westendorp results:

• PMC: $79
• PME: $249
• OPP: $149

Insight: Current pricing is below optimal range!

Action:

1. Raised prices to $79/149/299
2. Added enterprise tier at $499
3. Result: +35% ARPU without conversion decline

Conclusion

WTP research isn't a luxury — it's a necessity for proper pricing. Most companies leave money on the table because they're afraid to raise prices. Data from WTP research gives you confidence for pricing decisions.

Action steps:

1. Start with Van Westendorp survey (quick, simple)
2. Collect data by segments
3. Identify gap between current and optimal pricing
4. Test gradual price increases
5. Repeat research annually