Read the original at Lenny’s Newsletter ↗lennysnewsletter.com · subscriber post
By Lenny Rachitsky · lennysnewsletter.com · @lennysan on X · YouTube · LinkedIn
Kristen Berman walks through the four main quantitative willingness-to-pay methods (Van Westendorp, Becker-DeGroot-Marschak, multiple price list, and discrete choice), comparing their strengths and biases. She argues that incentive-compatible designs reduce hypothetical bias and that product framing shapes what people will pay. The post closes with practical tips and templates for running a pricing study.
Subscriber post — summary only01Key takeaways
- Pricing is a high-leverage growth lever that most product teams rarely test or discuss.
- Van Westendorp is simple but suffers from hypothetical bias, so use it cautiously for established categories.
- Add an incentive-compatible element so participants have skin in the game and cheap talk is reduced.
- Choose the method by product type: direct methods for familiar goods, choice-based for new or high-ticket items.
- Price perception is shaped by positioning and framing, so improving how customers understand value also changes willingness to pay.
“Talk to at least one person. Most companies are not even doing that.”Madhavan Ramanujam · Lenny’s Newsletter
02Frameworks mentioned
Van Westendorp Price Sensitivity MeterBecker-DeGroot-MarschakMultiple Price ListDiscrete Choice Analysis
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.