A price belongs to a choice
State the offer, unit, alternatives, channel, horizon and consequence. A stated number outside a credible choice does not establish a price.
Willingness to pay: choosing a method that commits to a real decision.
Decision supportedChoose a research method and a candidate price only when the offer, alternatives, purchase consequence and contribution by segment are explicit.
Short answer
Three distinctions before selecting a price.
Revenue is not contribution
Compare each candidate price through volume, variable cost, acquisition, retention and migration rather than through average declared preference.
Behaviour closes the loop
Use declared research to explore and a preorder or field test to validate the finalist price whenever the decision permits it.
Measure willingness to pay without confusing a response with a decision
Measure willingness to pay without confusing a response with a decision
- 01Define the real choice
Fix offer, customer, alternatives, channel, period and non-purchase before collecting a response.
- 02Explore a credible range
Use declarative methods to map the range and expose anchoring, framing and segment differences.
- 03Compare the finalists
Turn each price into contribution by segment, then compare it with conjoint or behavioural evidence.
- 04Publish the review condition
Retest when the offer, competitor set, inflation, package or purchase consequence changes.
ORIGINAL ASSET
Method comparison: evidence, realism and permitted use
The methods answer different questions. The behavioural test confirms a finalist only after the economic decision has been specified.
| Method | Evidence | Realism | Output | Result | Use |
|---|---|---|---|---|---|
| Van Westendorp | Stated | Low | Range | €42–68 | Explore |
| Gabor-Granger | Stated | Medium | Curve | €59 | Shortlist |
| Conjoint | Simulated choice | High | Attributes | €64 | Segment |
| Pre-order | Behaviour | High | Conversion | €59 | Confirm |
€5918% × €31€55,800
versus€6415% × €36€54,000
The behaviourally validated price maximises contribution.
Worked example · illustrative figures
The best revenue price is not automatically the best contribution price
Van Westendorp places the acceptable range at €42–€68. Gabor-Granger selects €59; conjoint suggests €64; a preorder observes 18% conversion at €59 and 15% at €64.
With €28 variable cost and 10,000 prospects, €59 gives 10,000 × 18% × €31 = €55,800. At €64, 10,000 × 15% × €36 = €54,000.
Launch at €59, keeping €64 as a richer-package or segment scenario to retest if the offer or alternatives change.
Acceptance conditions
Acceptance conditions
- 01
The offer, alternatives and purchase consequence are explicit.
- 02
Non-purchase is available in the research design.
- 03
Every finalist price is converted into contribution by segment.
- 04
At least one behavioural proof is required before a material rollout.
What this analysis does not prove
What this analysis does not prove
- Stated answers remain sensitive to anchors and desirability.
- A field test can alter reference prices or customer fairness perceptions.
- Estimates age when competitors, inflation or the package changes.
Works used
Works used
- Gabor & Granger (1966)
- McFadden (1974)
- Wertenbroch & Skiera (2002)