Ask a customer "what would you pay for this?" and you'll get a number that's almost useless. They'll lowball you, or guess, or tell you what they think you want to hear.
Ask them four questions about when a price starts to feel wrong, and you get something much better: a range of prices that feel acceptable. That's the idea Dutch economist Peter van Westendorp introduced in 1976, and it's still one of the quickest ways to find a price range you can defend.
How to use the Van Westendorp calculator
- Run the survey. Describe the offer precisely, including the billing period and whether prices include GST, then ask the four questions. The willingness-to-pay survey template has the wording.
- Export the answers and paste them in, one respondent per row, in this order: too cheap, bargain, getting expensive, too expensive. A header row is fine, and named columns are matched automatically. You can also upload a CSV.
- Leave "drop rows that aren't in order" ticked. Someone whose "too cheap" price is higher than their "too expensive" price didn't understand the question.
- Optionally add your cost to serve, to see your margin at each price point.
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How the maths works
For every price, the calculator works out four cumulative shares:
Too cheap(P) = share whose "too cheap" answer is at or above P Bargain(P) = share whose "bargain" answer is at or above P Getting expensive(P) = share whose "expensive" answer is at or below P Too expensive(P) = share whose "too expensive" answer is at or below P
Where the curves cross gives the four reference points, using the same convention as our Van Westendorp guide:
| Point | Curves that cross |
|---|---|
| Point of marginal cheapness (PMC) | Too cheap × getting expensive |
| Optimal price point (OPP) | Too cheap × too expensive |
| Indifference price point (IPP) | Bargain × getting expensive |
| Point of marginal expensiveness (PME) | Too expensive × bargain |
The acceptable range runs from PMC to PME. Some practitioners use inverted "not cheap" and "not expensive" curves instead, which gives a wider range, so the calculator shows that version too. Pick one convention and stick with it.
A worked example
The sample data is 200 answers for a monthly online membership for tradespeople, built to match the worked example in our guide. The curves cross at:
- PMC $22, OPP $26, IPP $28, PME $33
- Acceptable range: $22 to $33 a month
- Alternative convention: about $18 to $41
What would I do with that? Shortlist $27 and $29, both between the optimal and indifference points. Check them against cost to serve. Then test them with real sign-ups before deciding.
How to read the result
The range is the answer, not a single point. Price near the bottom for a low-friction entry tier, around OPP to IPP for your main plan, and near the top for a premium tier.
Remember the biggest weakness: people are answering hypothetically, not spending money. Mixing segments (a sole trader and a 50-person firm in one dataset) blurs both ranges, so aim for around 100 answers per segment and analyze them separately.
What to do next
- Read the full guide to the Van Westendorp price sensitivity meter, including the Newton-Miller-Smith extension.
- Put the range in context with willingness to pay and the step-by-step guide to how to price a subscription.
- Check your offer description first with the Synthetic Customer Panel, then make sure your shortlisted price covers costs in the Subscription Price Calculator.
Frequently asked questions
How many responses do I need for a Van Westendorp survey?
Aim for around 100 answers per customer segment. With fewer than about 30, the curves get lumpy and the crossing points jump around, so treat the result as a rough guide. If you sell to very different groups, such as sole traders and larger firms, analyze each group separately rather than pooling them, because mixed segments blur both ranges.
What is the optimal price point in Van Westendorp?
It's where the too cheap and too expensive curves cross: the price at which equal shares of people think it's too cheap and too expensive. It's a useful reference point, not the answer. Most businesses set their main plan somewhere between the optimal price point and the indifference price point, then test it with real buyers.
Why does my Van Westendorp chart look wrong?
The usual causes are a vague offer description, so people pictured different products; mixed segments; unclear billing periods, with monthly and annual answers in the same column; or many respondents who misread the questions. Drop out-of-order rows, remove obvious jokes such as $0 or $1,000,000, split segments, and check every respondent saw the same description.
Can I use Van Westendorp for B2B pricing?
Yes, if buyers can picture the product from a description and have a rough sense of what similar things cost. It works less well when price depends on volume or custom scope, or when you only have a handful of potential customers. For complex B2B deals, structured willingness-to-pay interviews usually tell you more than a survey.
Built on The Subscription Playbook
This tool turns frameworks from Robert Coorey's book into something you can use in minutes. Robert is the author of The Subscription Playbook and a Director at BPAG Accountants. More about Robert.