Van Westendorp pricing analysis

By @hormozi · Instagram

Source: https://www.instagram.com/reel/DeXXBb6ho82/?mdxt=MWJpYXBzMmltbGh4eA==

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Summary

Hormozi outlines the Van Westendorp pricing analysis, a four question framework he uses to price new offers before launch. He adds a twist by segmenting responses by customer wealth to get sharper pricing curves for different buyer groups.

Core ideas

One context card plus 7 ideas

Four price anchors: The method asks customers for the price that's too expensive, too cheap, borderline acceptable, and a bargain, mapping the full range of perceived value.
Too expensive threshold: Asking what price makes someone rule out the offer entirely sets the ceiling.
Too cheap threshold: Asking what price feels suspiciously low reveals where quality doubts kick in, setting a floor.
The stretch price: The "edge" price captures the point where buyers hesitate but still convert, useful for premium positioning.
The bargain price: Identifying what feels like a deal shows the sweet spot for volume or entry offers.
Segmentation by wealth: Hormozi pulls customer stats alongside pricing answers so he can separate rich and poor customer curves instead of treating all respondents the same.
Why it matters: Running both the four questions and the segmentation gives a much more accurate starting price for a new launch than guessing or using a flat average.

Quotes

“There's called the Van Westendorp pricing analysis. I do this most times when I launch a new offering.”
@hormozi

“At what price would this be so expensive that you wouldn't even consider it?”
@hormozi

“So then you can get really, really accurate with initial pricing.”
@hormozi

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