Van Westendorp vs. Gabor-Granger
Choosing the Right WTP Methodology for Your Lifecycle
Executive Summary
"A comprehensive battle of the methodologies. Learn when to use the Price Sensitivity Meter for exploratory research versus Gabor-Granger for peak optimization and elasticity forecasting."
01.The Battle of the Heavyweights
In the world of quantitative pricing research, two methodologies stand head and shoulders above the rest: Van Westendorp’s Price Sensitivity Meter (PSM) and the Gabor-Granger Method. While both aim to measure Willingness-to-Pay (WTP), they approach the problem from fundamentally different angles.
Choosing the wrong one isn't just a tactical error; it can lead to pricing your product out of the market or, equally dangerously, undercutting your own value. This guide will dismantle both methods, showing you the math, the psychology, and the strategic timing for each.
02.Van Westendorp: The Exploration Engine
The Four Questions
VW asks: 1. Too Expensive (Reject), 2. Cheap (Bargain), 3. Expensive (Acceptable), 4. Too Cheap (Quality Concern). This triangulates the 'Zone of Acceptability'.
Ideal for Early Stage
Best used when you don't have a starting price point. It uncovers the natural boundaries of value in the customer's mind before you anchor them with a number.
Output: Acceptability Curves
The intersection points (OPP and IPP) tell you the price range where resistance is lowest, providing a strategic ceiling and floor.
03.Gabor-Granger: The Precision Optimizer
The Price Ladder
Respondents are shown a price. If they say 'Yes', the price goes up. If 'No', it goes down. It mimics a live negotiation.
Ideal for Maturity
Best for established categories where you have a hypothesis (e.g., 'Can we move from $49 to $59?') and need to see the exact drop-off point.
Output: Revenue Demand Curve
It produces an explicit demand curve. You can see the exact revenue peak, often revealing that a lower conversion rate yields higher profit.
04.Deep Dive: The Psychology of 'Too Cheap'
One of the unique advantages of Van Westendorp is the 'Too Cheap' question. Standard economic models assume that lower prices always increase demand. Behavioral economics proves otherwise.
In many categories—software, healthcare, luxury goods—a price that is too low triggers a Quality Concern Bias. If an enterprise CRM costs $1/month, users won't think 'What a deal!'; they will think 'This is unstable software.' VW is the only method that identifies this 'Price Floor' where your brand value begins to deteriorate.
05.Comparative Decision Matrix
Sample Size
VW requires N=300 for clean curve intersections. Gabor-Granger can work with N=150-200 for directional data.
Bias Level
VW is less prone to 'gaming' because it's open-ended. Gabor-Granger can be biased if the starting price is too high or too low (Anchoring).
Execution Speed
Both are relatively fast surveys, but Gabor-Granger requires logic branching in the survey software (e.g., Typeform/Qualtrics).
Market Fit
Use VW for disruptive innovation. Use Gabor-Granger for incremental adjustments to existing SKUs.
The Implementation Roadmap
Validate the Concept
Ensure the respondent fully understands the value prop before asking about price. Show a video or high-fidelity mockup.
Filter the Sample
Discard 'speeders' and respondents who provide irrational data (e.g., where 'Too Cheap' is higher than 'Too Expensive').
Analyze the Multi-Segment Mix
Run the analysis separately for different personas. Your 'Startup' segment will have a wildly different Zone of Acceptability than your 'Enterprise' segment.
Combine with Conjoint
Use VW to find the range, then Conjoint to find the exact feature-price trade-off within that range.
Industry Benchmarks
Target for publication-grade research.
Typical width of the Zone of Acceptability in mature markets.
Where resistance from being too cheap or too expensive is balanced.
Expert Q&A
Q: Can I use these for B2B?
Yes, but ensure you are surveying the decision-maker, not just the user. In B2B, the 'Too Cheap' threshold is often much higher due to risk aversion.
Q: Which is better for competitive markets?
Gabor-Granger is better if you want to include competitive price points as comparison anchors.