Test the price for real

People say they would pay more than they end up paying. So when a prospect tells you over coffee that your new price sounds fine, you have learned less than it feels like. Saying yes costs them nothing. Paying does.

What the research found

The gap between what people say they would pay and what they pay when the purchase is binding even has a name, hypothetical bias, and it is one of the most often repeated findings in marketing and experimental economics. A meta-analysis of 77 studies of consumer goods compared the two directly. On average, what shoppers said they would pay was about a fifth higher than what they paid when the money was real.

That does not make asking useless. When researchers compared people's answers with what they then bought, the price the answers pointed to was close to the right one. What ran high was the number of people saying yes: at that price, a third to a half more said yes than went on to pay. The researchers' advice is to measure with real money where you can, because binding answers predict buying better than spoken ones.

What it means for you

A prospect who says "yes, that price is fine" is not lying to you. They are guessing, and the guess is free. The price itself may well be right. What the conversation cannot tell you is how many people like them will pay it. That is the number your revenue plan rests on, and it is the one a friendly chat inflates.

Three ways to test a price with real money

• Take pre-orders: they pay now, and you deliver later.
• Run a paid pilot: one month, invoiced at the price you want to charge.
• Charge the new price to new customers first, leave existing customers where they are, and see who buys.

The research shows that binding answers predict better. It did not test these three ways in particular. They are practical ways to get money moving before you build anything on a price.

How Bamya CRM helps

Bamya CRM is a free AI-assisted CRM. When you change a product's price, only new deals get it, and the deals you already have keep the price they were agreed at.

Research: Schmidt & Bijmolt (2020), Journal of the Academy of Marketing Science; Hofstetter, Miller, Krohmer & Zhang (2021), International Journal of Research in Marketing. Both are about consumers buying mostly low-priced goods, largely in North America and Europe; there is no comparable data for business buyers, so the gap of a fifth should not be read as theirs.