Price sensitivity meter
Also called Van Westendorp, Van Westendorp price sensitivity meter, PSM
Four price questions about one offer (too cheap to trust, a bargain, getting expensive, too expensive) whose answer curves cross at an acceptable price range.
Peter van Westendorp's method asks each respondent for four prices, in rising order, for the same clearly described offer. Plot, at every price, the share who would call it too cheap or a bargain (falling curves) and the share who would call it expensive or too expensive (rising curves). Where the curves cross gives the edges of an acceptable range, an indifference price and a point of equal resistance.
It measures perception, not demand. Nobody spends money in a survey, and people are good at saying what feels expensive and poor at predicting what they would buy. Use the range to choose prices worth testing with a purchase-intent question or a live experiment.
The offer has to be identical for everyone: the same features, the same currency and the same billing period. Someone picturing a monthly plan and someone picturing a year are answering different questions.
Where it goes wrong
Rows out of order. A respondent whose 'too cheap' is above their 'too expensive' misread the questions; exclude and count those rows rather than sorting their numbers for them.