Research methods
Willingness to pay: how to measure it and where each method goes wrong
What willingness to pay means, the main ways to measure it, from direct questions and Van Westendorp to conjoint and real offers, and the biases in each.
Willingness to pay (WTP) is the highest price a particular buyer would pay for a particular offer, given the alternatives they have. You can measure it by asking people directly, by showing them prices and recording yes or no, by asking them to choose between priced options, or by making a real offer. Methods that do not involve a real purchase produce a stated number, and stated numbers tend to run high.
This page compares the measurement methods and the biases in each. If you want the interview approach in detail, see how to research willingness to pay without asking for a guess.
Stated WTP runs higher than real WTP
Researchers call the gap between what people say they would pay and what they actually pay "hypothetical bias." A 2020 meta-analysis by Schmidt and Bijmolt in the Journal of the Academy of Marketing Science pooled 77 studies from 47 papers, with 115 effect sizes. Read the abstract. It found:
- An average hypothetical bias of 21%, meaning stated WTP ran above real WTP.
- Indirect methods such as conjoint analysis overestimated real WTP more than direct questions did, which the authors note runs against conventional wisdom.
- Larger bias for higher-valued products, specialty goods, and designs where the same person answers about several prices.
Two cautions apply. The studies were about consumer goods, and an average is not a correction factor for your market. Use it as a reason to treat any survey number as an upper estimate until someone takes a real buying step.
A 2011 study by Miller, Hofstetter, Krohmer and Zhang in the Journal of Marketing Research adds a useful twist. It compared open-ended questions, choice-based conjoint and two incentive-aligned methods with real purchases. The two incentive-aligned methods passed the authors' statistical and decision tests, but the authors also found that hypothetical methods with bias could still point to the right pricing decision. Read the abstract. A biased number can still point to the right price; the absolute level deserves more suspicion.
Compare the ways to measure WTP
| Method | What you ask | Main bias or blind spot |
|---|---|---|
| Open-ended question | "What is the most you would pay?" | Guesswork; people may anchor on a price they saw recently or answer low to influence yours |
| Gabor-Granger | "Would you buy at $X?" moving up after a yes, down after a no | One product in isolation; Sawtooth notes it is "so clearly a pricing game" that answers may not predict purchases |
| Van Westendorp | Four thresholds from too cheap to too expensive | Measures perception, not choice; no competitors in view |
| Monadic test | Each group sees one price, often next to competitors and a "none" option | Needs larger samples, one concept at a time |
| Conjoint analysis | Choose between bundles of features and prices | Still hypothetical; the meta-analysis above found indirect methods overestimated more |
| Incentive-aligned bid (BDM) | State a bid; a random price is drawn and the person buys if the bid is at least that price | Hard to run for B2B products that need contracts and approvals |
| Past-purchase interview | Walk through the last time they paid for a comparable fix | Small samples; the person may not know the full budget |
| Real offer or paid pilot | A specific price for a specific scope | Narrow: tells you about this buyer and this offer only |
Sources for the survey methods: Sawtooth on pricing research methods, Sawtooth on Gabor-Granger and Sawtooth on Van Westendorp. For a step-by-step Van Westendorp analysis, see the Van Westendorp guide.
A hypothetical example: reading a survey number
Suppose you sell a scheduling tool to dental practices and survey 40 office managers. The median answer to "What is the most you would pay per month?" is $150. What should you do with that?
First, do not divide by 1.21 and call the result your real WTP. The 21% figure is an average across consumer studies, not a property of dental office managers. The arithmetic ($150 / 1.21 ≈ $124) only shows how much a bias of that size would matter.
Second, ask who answered. An office manager may run the schedule but not sign the contract. If the dentist-owner or a group's operations lead approves software, their view of the price matters more. See how to interview users, buyers and champions.
Third, turn the number into two prices to test. You might offer $99 and $149 per month to different practices through the normal sales process and record what each does next: requests a proposal, books a demo with the owner, or signs a pilot. Those actions are closer to real WTP than any survey answer.
Reduce bias in whatever method you use
- Describe a concrete offer. "A tool that fills cancelled appointments from your waitlist, $149 per practice per month, cancel any time" gets a better answer than "a scheduling tool."
- Put alternatives in view. People price against what they have. Name the current workaround and any competing product.
- Show each person one price when you can. The meta-analysis found larger bias when the same person evaluated several prices.
- Ask about the past first. A question about what they last paid for a comparable fix grounds the later price questions. GOV.UK's interview guidance recommends stories and real examples over generalities.
- Record who controls the budget. Mark each answer as from a user, an influencer or the approver.
B2B WTP is a company decision
In consumer research, the person answering usually is the buyer. In B2B, WTP depends on budget cycles, procurement rules and whether the spend replaces an existing line item. A manager can mean it when they say $150 is fine and still be unable to buy it this quarter.
That is why B2B teams often combine a small survey with interviews of people who see many buying decisions: procurement leads, former salespeople in the category, or consultants who implement similar tools. They can explain what a normal budget line looks like and who signs it, without you guessing. Pricing research shows how to combine these methods in one study.
Next step
Pick one method from the table that fits your stage, then plan a real buying step to check it. If you need office managers, owners or procurement people in dental services to talk to, search on Instant Expert. It finds people whose work matches your question, you review them, it sends your invitations, and you pay for each call that gets booked.