![[Pasted image 20230620192109.png]] [Van Westendorp’s](https://en.wikipedia.org/wiki/Van_Westendorp's_Price_Sensitivity_Meter) Price Sensitivity Meter or how to improve the quality of your product's price strategy. Consider using the Van Westendorp framework, which is utilized for determining the optimal price for a product or service. The strategy is based on four questions that are posed to a sample of potential or current customers. Here's an example [survey](https://docs.google.com/forms/d/e/1FAIpQLScwuQEWBkxsNftEkvUgFx2Ov7pKcrOx8IUlZ241lvet7ziXCQ/viewform?pli=1) that was used to determine the price for ChatGPT: _- At what price do you consider it so expensive that you would not buy it? (Too expensive price)_. _- What is the highest price at which you would still consider purchasing this product? (High price)_. _- At what price do you consider ChatGPT a good value for the money? (Good price/quality)_. _- At what price do you think the quality of the product may not be very good?_ How to work with Van Westendorp's Price Sensitivity graph: Plot the responses on a graph, where X represents the price and Y represents the percentage of respondents. Price ranges with a significant number of responses can be used as a basis for subsequent price testing. The intersection of the "too cheap" and "expensive" lines can serve as the lower boundary of an acceptable price range (the point of marginal cheapness). Similarly, the intersection of the "too expensive" and "cheap" lines can be considered as the upper boundary of an acceptable price range (the point of marginal expensiveness or PME). Intersections where there is usually more agreement represent the point where the "expensive" line intersects the "cheap" line. This is referred to as the "indifference price point" or IPP. Finally, the intersection of the "too cheap" and "too expensive" lines represents the "optimal price" or OPP. This is the point where an equal number of respondents describe the price as exceeding their upper or lower limits.