Willingness to pay
Willingness to pay is the maximum amount a customer is prepared to spend for a product or service.
Willingness to pay (WTP) is the highest price a customer would accept before choosing not to buy. Understanding WTP by segment helps businesses set optimal prices and design tiered offerings that capture more value.
Example: Through customer surveys and pricing experiments, a SaaS company discovers that SMB customers have a WTP of around $50/month, while enterprise customers are willing to pay $500/month for the same core product with added features.
