Ask Teresa: How Can You Test a Customer’s Willingness to Pay?

Teresa Torres responds to a recommendation in Monetizing Innovation that teams simply ask customers about their willingness to pay, which she firmly rejects. She argues that hypothetical answers are unreliable because people routinely mispredict their own future behavior, illustrated by her own jeans purchase. She lays out three approaches in increasing reliability: asking about past spending, running demand tests such as a mock pricing page with a waitlist call to action, and asking customers to actually pay, even before the product exists. The core lesson is to observe real behavior rather than collect opinions, while protecting customers from overpromising through concierge delivery, clear risk disclosure, or refunds.

01Key takeaways

• Discard answers to 'Would you pay for this?' because people are poor predictors of their future purchasing behavior.
• Ask customers what they currently pay to solve the same problem, including non-software workarounds.
• Use a mocked pricing page with a waitlist call to action to observe interest without taking payment.
• Recognize that waitlist signups do not guarantee purchases, so test with real payment when possible.
• Pre-sell or concierge-test the offer, but never promise what you cannot deliver.
• Disclose development risk upfront and be ready to refund customers if the product is not built.

02Key sections

Why asking 'would you pay?' fails

Hypothetical willingness-to-pay answers are unreliable because people overestimate or misjudge what they would actually spend. Torres uses her jeans example to show how stated beliefs can change once a real experience occurs.

Good: ask about past behavior

Asking what customers currently pay for similar solutions gives a grounded ballpark. Teams should also broaden their view of competitors to include non-software alternatives people use today.

Better: run a demand test

A mocked-up pricing page with a 'Join the Waitlist' call to action lets teams observe behavior without taking payment. Its limitation is that many waitlist signups never convert to buyers.

Best: ask customers to pay now

Pre-orders, concierge delivery, sales-led demos, and Kickstarter-style funding let teams test purchase intent before building. These approaches must avoid overpromising and include risk disclosure and refunds.

Guiding principle: do right by the customer

Torres stresses that pre-sale tactics are only ethical if the team delivers the promised value or communicates risk and refunds clearly. Real behavior, not predictions, should drive the decision.

03From the post

“I recently read Monetizing Innovation by Madhavan Ramanujam and Georg Tacke. Overall, I can recommend this book, but with one major caveat. In the book, the authors recommend that for any new product idea, we need to consider the monetization potential from the very beginning. This I agree with. However,”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.