Pricing Excel Model – Van Westendorp Price Sensitivity Meter

Financial Model, Financial Services, General Excel Financial Models, Personal Finance

Excel, Financial Analysis, Financial Due Diligence, Financial Modeling, Macros, Profitability Analysis, Sales Pipeline

The Van Westendorp Price Sensitivity Meter (PSM) is a market research tool that helps businesses understand consumer price sensitivity for a particular product or service. The PSM involves presenting survey respondents with a range of prices and asking them to indicate the lowest price at which they would consider buying the product or service, the highest price at which they would still consider buying it, and the price at which they would consider the product or service to be a “bargain” or “too expensive.”

The Newton-Miller extension template is a tool that helps businesses understand how different factors, such as the perceived value of a product or service and the competition, may impact consumer price sensitivity.

Using these tools together can help a business determine an optimal pricing strategy for its product or service. For example, a business might use the Van Westendorp PSM to identify the range of prices that are acceptable to their target market and then use the Newton-Miller extension template to evaluate the impact of various pricing scenarios on the perceived value of the product or service and the competitive landscape.

Overall, the Van Westendorp PSM and the Newton-Miller extension template can be a powerful combination for understanding consumer price sensitivity and developing a pricing strategy that maximizes revenue and profitability.

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