Price with Confidence: A Founder’s Guide

Pricing isn’t a guessing game. But most startups still treat it like one. When you’re launching something new, it feels like there are no comps, no benchmarks, and no historical data—and you end up throwing darts in the dark. That’s where pre-launch pricing research comes in.

In this article, we’ll explore three methods you can run before you launch:

• Monadic Testing

• Price Laddering

• Van Westendorp Price Sensitivity Meter

You’ll learn how each works, their pros and cons, and a simple heuristic for deciding which approach fits your stage, budget, and market clarity.

1. Monadic Testing

Monadic testing is the simplest approach: you present a single price point to respondents and ask if they would buy at that price.

How it works:

• Show one price to each survey taker

• Collect one yes/no or purchase-intent response

Pros:

• Fast and cheap to run

• Low risk of confusing respondents with multiple price points

• Good for an initial sanity check

Cons:

• Susceptible to false positives if your price is too low

• Doesn’t reveal the maximum price customers would pay

• Offers no insight into price tolerance or sensitivity

When to use monadic testing:

• You’re in the very early pre-launch phase

• You need a quick gut-check on whether your price is in the ballpark

• You have a tight survey budget and minimal time

2. Price Laddering

Price laddering expands on monadic testing by presenting respondents with a sequence of prices—typically three—and asking at which points they would buy, hesitate, or walk away.

How it works:

• Ask three questions, each with a different price point

• Track purchase intent or acceptability at each price

Pros:

• Captures a rough sense of where demand falls off

• Reveals relative sensitivity across a small range

• More nuance than monadic testing

Cons:

• Susceptible to false positives if respondents treat it like a negotiation

• Still limited in defining a comfort zone

• Risk of survey fatigue if price gaps are too wide or too narrow

When to use price laddering:

• You have some preliminary idea of the price range

• You want a quick, directional sense of elasticity

• You can afford a slightly longer survey than a monadic test

3. Van Westendorp Price Sensitivity Meter

The Van Westendorp method uses four targeted questions to map out consumer perceptions of cheapness, expensiveness, and two indifference points—yielding a clear comfort zone.

How it works:

• Ask respondents:

  1. At what price would this product be so cheap you’d question its quality?

  2. At what price would it start to feel like a bargain?

  3. At what price would it start to feel too expensive?

  4. At what price would it be so expensive you wouldn’t consider buying?

• Plot the four distributions to find an optimal range (this can be easier said than done - we invite you to contact us on this one.

Pros:

• Provides a pricing range, not just a single point

• Highlights thresholds where price perception shifts

• Works pre-launch without sales data

Cons:

• Requires more market context to interpret the curves

• Slightly more complex to analyze and visualize

• Needs a larger sample size to smooth out distributions

When to use Van Westendorp:

• You need depth on price perception and comfort zones

• You have enough survey budget and time for a 4-question module

• You’re comfortable interpreting distribution curves

How to Choose the Right Method: A Heuristic

Use this decision guide based on your stage, budget, and need for precision:

• If you’re racing against time and need a quick sanity check → Monadic Testing

• If you have a rough price range and want directional elasticity insights → Price Laddering

• If you need to pinpoint a reliable comfort zone and can allocate survey resources → Van Westendorp

You can also sequence methods: start with monadic tests to narrow your range, use laddering to refine it, then run Van Westendorp for your final pre-launch benchmark.

Final Thoughts

Pre-launch pricing research transforms pricing from guesswork into data-driven strategy. Each method has trade-offs between speed, cost, and insight. By matching your choice to your stage and objectives, you’ll avoid leaving money on the table—or pricing yourself out of the market.

If you’re curious about running any of these studies—or want a customized heuristic for your product—feel free to reach out. Your market can tell you exactly where value lives; you just need to ask the right questions.