Price Sensitivity Meter

The Price Sensitivity Meter (PSM) is a research tool used to identify how consumers perceive and react to different price points for a product or service. It involves asking customers to assess various prices—such as which prices they find too expensive, too cheap, or just right. By analyzing these responses, businesses can determine the optimal pricing range that balances customer willingness to pay with profitability. Essentially, PSM helps companies understand the boundaries of acceptable prices and identify the price point most likely to maximize sales and customer satisfaction.