Know-How Exchange : Research/Metrics

Hi Denise -

Pricing is a very tricky area to cover in surveys. One possible technique you might want to investigate is called the Von Westendorp price sensitivity meter:

https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensitivity_Meter

I am not sure what you expect your response rate to be, but you would need most of the 75 respondents (assuming one respondent per company) to complete the survey to get anything helpful out of this technique. I have used this methodology with success in other situations - typically, we've asked the question open-ended first, and then followed up with Von Westendorp battery of questions. The methodology also includes some caveats and assumptions, so you'll want to familiarize yourself with those as well. The above wikipedia article should at least provide you with a good start.

Good luck!

My experience is that it's almost impossible to get good pricing information from a market research survey.

First of all, you're placing the respondents in a conflict situation. If they tell you something is worth a lot to them (i.e., they'd expect to pay a lot), they are essentially negotiating against themselves. You'll price it high, and they'll have to pay more. And if they tell you it's not worth much, then you might not bring it to market because YOU can't make enough to meet your own profit goals.

Next, even if they want to be totally honest with you, they often don't know what they'd really be willing to pay until they're confronted with a bona fide purchase decision. We've seen this phenomenon many times. People will say one thing in responding to a research survey and then behave in a completely different way in the "real world."

Finally, the amount customers will pay depends importantly on how you position the product or service, how they perceive you as a company/supplier, and the ease of doing business with you. It might also be a function of their relationship with your sales representative (i.e., how much they trust him/her). You can't easily research those things in a simple survey.

Net, I'd rather see you trust an experienced marketing consultant on pricing strategy issues than try to "learn truth" from a home-grown survey. You could really mislead yourself if you rely on flaky research results, and most pricing research is flaky.

All that said, I think jlevin's advice above may be your second-best bet ... as long as you have a large enough base of respondents.