What is a price sensitivity analysis?

A price sensitivity analysis measures how changes to your pricing strategy affect demand for your product or service. This often involves issuing price sensitivity surveys to your customers and even your competitors’ customers. What are price sensitivity surveys?

What is a high price sensitivity?

Products with a stable demand regardless of price changes are inelastic. Such goods are usually premium or ones without alternatives. High price sensitivity means that customers are not likely to continue buying a product even after a minor price increase — they will start thinking it is unreasonably overpriced.

How do you understand price sensitivity drivers?

To understand price sensitivity drivers, we need to delve into the experience dataaround price and go deeper into a customer’s mindset around price, value, and desirability of goods. One of the most useful tools for doing this is Van Westendorp’s Price Sensitivity Meter.

What does a low price sensitivity score mean?

If you’re just not into math (don’t blame you), I’d suggest using a price sensitivity calculator. A low price sensitivity score could also mean that newly shipped features were worth the price hike or that customers are reluctant to switch to a different product because they’re used to how your product works.