Gabor-Granger pricing: method and worked example

Gabor-Granger tests whether people would buy the same offer at different prices. It estimates stated demand at each price and helps compare revenue potential before a launch or price change.

What does Gabor-Granger measure?

Respondents answer a purchase question at prices from a predefined ladder. Their answers estimate acceptance at each price. Multiply price by acceptance to get a revenue index: a comparison of tested prices, not a sales forecast.

How do you design a Gabor-Granger study?

1. Describe one offer, including what is included and the billing period.
2. Choose realistic prices that cover the decision you need to make.
3. Ask the same purchase question at each tested price. The sequence may adapt to earlier answers.
4. Recruit people who understand the product and could buy it. Pilot the wording before launch.

Plan response counts around the precision and audience comparisons you need. Record the sample, field dates, and rules for incomplete or inconsistent answers.

Gabor-Granger example: calculate a revenue index

These illustrative results describe a monthly plan. Revenue index = price × acceptance as a decimal.

$30 has the highest index: $30 × 0.55 = $16.50. A lower price may still suit an adoption goal. A higher one may better cover service costs. The index does not measure profit.

How should you read the demand curve?

• Look for sharp drops in acceptance, and check whether nearby prices are meaningfully different.
• Compare relevant customer groups only when each has enough responses.
• Investigate answers that accept a high price but reject a lower price for the same offer.
• Validate the chosen price against actual conversion, margin, and retention.

Gabor-Granger or Van Westendorp?

Use Gabor-Granger when the offer and candidate prices are clear. Van Westendorp explores perceived price boundaries before you choose a ladder. Conjoint analysis is better suited to testing features, packaging, and price together.

What can weaken the results?

Changing the offer between prices makes the result hard to interpret. An implausible ladder, vague concept, or audience outside your market can do the same. Repeated prices can also reveal the purpose of the exercise and affect answers. Stated intent leaves out real budgets and competing offers.

How do you run Gabor-Granger in SenseFolks?

PricePoint supports Gabor-Granger purchase-intent research and Van Westendorp price-sensitivity research. Create a pricing survey around one clear offer and embed it where qualified visitors can evaluate it. Follow the PricePoint reference for setup and available options.

Frequently asked questions