Van Westendorp

Definition: What is Van Westendorp?

The Van Westendorp Price Sensitivity Meter (PSM) is a pricing research method that helps identify consumers’ acceptable price range for a product or service. It captures perceptions of value by asking respondents four key price-related questions.

For example, a software company might use Van Westendorp analysis to determine whether customers see its product as too cheap, too expensive, or priced just right.

How Van Westendorp Works

Respondents answer four key questions:

1. At what price would you consider the product too expensive?
2. At what price would you consider it too cheap (questioning quality)?
3. At what price would you consider it a bargain?
4. At what price would you consider it getting expensive but still acceptable?

Analysis: Plot the four cumulative distributions to identify key thresholds: the optimal price point, acceptable price range, and indifference price point.

Best Practices for Van Westendorp

• Provide a clear product description before asking price questions.
• Use realistic price ranges based on market context.
• Exclude extreme outliers to ensure accuracy.
• Combine results with behavioral or purchase intent data for validation.

Common Mistakes to Avoid

• Using Van Westendorp in isolation for final pricing decisions.
• Misinterpreting the “too cheap” threshold as a lower boundary for pricing.
• Ignoring segment differences in price perception.
• Testing price points irrelevant to actual purchase behavior.

Final Takeaway

Van Westendorp analysis gives brands a clear window into how consumers perceive value and affordability. By pinpointing the optimal price range, companies can balance profitability, competitiveness, and customer satisfaction with confidence.