Pricing Questions That Get You Nowhere
As humans, we idealize our future selves but are more honest about our past outcomes. The reality is people are terrible at predicting what they’ll do. If you take at face value what people say about a choice they will make in the future, you'll end up creating the wrong company. That’s why it's critical in pricing to frame your research methodology around your respondents’ past experiences and behavioral outcomes.
If you believe what people say about a choice they will make in the future, you'll end up building the wrong solution.
Among the worst ways in which you can go about finding pricing insights are to ask questions such as:
Would you buy a product/solution that did “_____” for you?
What would you pay for a product/solution that solved the “_____” for you?
These just get you nowhere. The truth is unless people have a direct experience with the offering and its actual benefits, they simply can’t make a reliable estimate for what it is worth. And it’s important to keep in mind that one of the most essential roles of the pricing researcher is to get to the value one gains by using a tool or a process – even when they don’t yet exist!
Unless people have a direct experience with the offering and its actual benefits, they simply can’t make a reliable estimate for what it is worth
When asked point blank, people can’t easily translate their experiences and outcomes into quantified statements of value. Therefore, the pricing researcher must approach the learning in different ways. Think of all the stories about flopped products that were launched based on intensive consumer research that predicted high levels of market adoption!?!
We rely on reference points when we need to recall what somethings is worth. Especially for new products or new-to-the-world technologies, people simply don’t have sufficiently reliable reference points from which to draw their value judgments. Therefore, the pricing researcher has to guide their respondent to identify and use the right reference points to rely on.
We rely on reference points when we need to recall what somethings is worth.
So, stay away from hypothetical questions and stick to the actual experiences. Here are some tips:
Can you walk me through the last time you used “____”?
Can you tell me what you did the last time you were trying to solve a similar problem or accomplish “____” (a relatable outcome)?
How do you solve for “____” today? What do you use? What do you pay for that tool/solution/service?