Ask any product manager how much time their organization has invested in developing a product and the answer will be “weeks,” “months,” or even “years.” After all that effort, a dilemma arises: set prices too high, and you miss out on sales. Set them too low, and you miss out on revenue. How do you optimize return on investment? Pricing research. 

It may be tempting to simply ask customers, “How much would you pay for our product?” However, most people can’t give you that answer. Your target market has every motivation to lowball their answer either consciously or subconsciously. What should you do instead? 

AMS consultants are well-versed in designing and analyzing pricing studies that utilize four established methods. The pricing experts at AMS have extensive experience matching client pricing objectives with the best methodology. 

The first method, conjoint analysis, is considered the most robust and reliable. Conjoint analysis is a survey technique and discrete-choice model used in market research to measure consumer preferences for products and services. Rather than directly asking customers how much they would pay, conjoint analysis presents them with a series of competing, attractive offers in a carefully designed experiment. Organizations across many industries regularly use conjoint analysis – recognized as the gold standard - to design products, set product prices, and predict sales. 

Other proven methods include the Van Westendorp Price Sensitivity Meter, monadic price testing, and Gabor-Granger technique, which have their own sets of benefits and use cases. These can be particularly helpful when you require an exploratory estimate of customer willingness to pay.  

Our approach to pricing consulting rests upon our team’s groundbreaking academic research and has been tested in the real world—where multi-million-dollar decisions are at stake and errors are irreversible. We apply our expertise to every pricing study we conduct, spanning consumer products, services, medical devices, technology, engineered and industrial products, and more.