Newsletter · long read

The ultimate guide to willingness-to-pay

Kristen Berman · Lenny's Newsletter Freemium Advanced

Four actual research methods (Van Westendorp, Becker-DeGroot-Marschak, Gabor-Granger, discrete choice) explained well enough to run one yourself, with templates. This is the answer to "how do I find willingness to pay without asking people what they would pay".

  • McKinsey's number: a 1 percent improvement in pricing can raise profits by up to 11 percent.
  • Of 60 software companies surveyed, half had never run a pricing study and only a quarter had A/B tested price.
  • Van Westendorp is everywhere in blog posts but used by only 8 of those 60 companies.
  • Hypothetical answers inflate: a donation study drew 310 dollars real versus 780 dollars pledged.
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The question it answers

  1. How do I find out what customers will actually pay without just asking them?

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