Van Westendorp Price Sensitivity Meter
Determine the acceptable price range for your product using the Price Sensitivity Meter (PSM). Analyze psychological price thresholds.
Key Metrics
Minimizes purchasing resistance
Perceived as "Fair Price"
Data Source
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Price Sensitivity Curves
Reading the PSM Chart
The 'Sweet Spot' is the range where the majority of your market accepts the price.
The Optimal Point (OPP)
Where 'Too Cheap' and 'Too Expensive' cross. This minimizes purchasing resistance. It is often the volume-maximizing price.
The Indifference Point (IPP)
Where 'Cheap' and 'Expensive' cross. This is the price perceived as most 'fair' or standard for the category.
The Gap
If the OPP is lower than the IPP, it suggests a mass-market, price-sensitive product. If OPP > IPP, it suggests a strong premium brand.
Execution Steps
Prepare your survey data CSV. It must contain 4 columns corresponding to the standard PSM questions.
Upload the CSV to the tool using the button below.
The chart will plot the cumulative frequency of responses for 'Too Cheap', 'Cheap', 'Expensive', and 'Too Expensive'.
Look for the intersection points to find your Optimal Price Point (OPP) and Indifference Price Point (IPP).
Pro Strategy
- Pricing below the OPP often leaves money on the table without significantly increasing volume, as quality concerns ('Too Cheap') rise.
- If the curve is very flat, it indicates low price sensitivity (inelastic demand). If steep, small price changes will have big impacts.
- Use the 'Too Cheap' curve to identify the psychological floor where your brand equity starts to suffer.
Core Concepts
Optimal Price Point (OPP)
The intersection of the 'Too Cheap' and 'Too Expensive' curves. At this price, the percentage of people who reject the product due to price (high or low) is minimized.
Indifference Price Point (IPP)
The intersection of the 'Cheap' and 'Expensive' curves. This represents the price where the most customers feel the product is priced fairly.
Range of Acceptability
The price range between the Point of Marginal Cheapness (PMC) and Point of Marginal Expensiveness (PME).
What is Van Westendorp Price Sensitivity Meter?
The Van Westendorp Price Sensitivity Meter (PSM) is a market technique for determining consumer price preferences. Instead of asking 'What would you pay?', which yields unreliable data, it asks four specific questions to map psychological thresholds of 'Too Cheap' vs 'Too Expensive'.
Best For
- • Launching a new product with no historical data.
- • Repricing an existing product for a new market segment.
- • Understanding the 'Psychological Floor' where quality is questioned.
Limitations
- • Does not account for competitive context (what else is on the shelf).
- • Assumes the respondent understands the product value fully.
- • Can skew low if respondents try to 'game' the survey to get a cheaper price.
Alternative Methods
Gabor-Granger
Better for established products to find maximum willingness to pay.
Conjoint Analysis
Best for complex products with many features to trade off.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
SaaS Productivity Tool Launch
A startup assumed a $10/mo price point based on competitors, but had low conversion.
Ran a Van Westendorp survey with 500 beta users.
Organic Coffee Brand
Needed to price a new premium blend without alienating grocery shoppers.
Surveyed 1,000 coffee drinkers.
Online Course Pricing
Creator was unsure whether to charge $99 or $499.
Van Westendorp revealed a bifurcation. One group peaked at $100, another at $500.