Gabor-Granger

Every pricing decision is a tug of war: raise the price and you earn more per sale but lose some buyers; lower it and you win buyers but earn less each. Somewhere between the two extremes sits the price that brings in the most total revenue. Gabor-Granger is built to find it.

The method, developed by economists André Gabor and Clive Granger, does something Van Westendorp doesn't: it measures actual purchase intent at specific prices, so you can trace demand and compute revenue at each point.

How It Works

Each respondent is shown the product at a specific price and asked if they'd buy it. Say no, and they may be offered a lower price; say yes, a higher one. Across the sample, the share who would buy at each price traces a downward-sloping demand curve.

The revenue index is simply price times the demand percentage (divided by 100). It's a relative measure — compare it across price points, not as absolute revenue — and its peak marks the revenue-maximizing price.

Reading the Curve

Two curves come out of the study, shown together in the chart above: demand falling as price rises, and the revenue index that peaks somewhere in the middle.

• Demand curve: the share willing to buy at each price
• Revenue index: price × demand%, peaking at the optimal price
• Drop-off analysis: where demand falls off a cliff — a psychological threshold
• Confidence intervals: how much to trust each point given the sample

Gabor-Granger vs Van Westendorp

Running a Gabor-Granger Study

1. 1Pick a realistic set of price points to test — spanning below and above your best guess.
2. 2Ask each respondent whether they'd buy at a shown price, adjusting up or down by response.
3. 3Compute the share who would buy at each price — the demand curve.
4. 4Multiply price by demand to get the revenue index at each point.
5. 5Read the revenue peak as the optimal price, and check the confidence intervals.

Gabor-Granger in the SKARI Survey Lab

SKARI's Survey Lab runs the full Gabor-Granger workflow: it collects purchase intent at each price and computes the demand curve, revenue index, and optimal price.

• Demand curve from purchase intent at each price point
• Revenue index (price × demand%) with the optimal price highlighted
• Drop-off analysis and price-sensitivity read
• Confidence intervals on each price point's demand

Frequently Asked Questions

Does the lowest price win?

Almost never on revenue. The lowest price sells the most units but usually earns less total than a higher price with slightly fewer buyers.

Gabor-Granger or Van Westendorp?

Van Westendorp to explore a range early; Gabor-Granger to optimize revenue once you have a concept and candidate prices.

How many price points?

Usually four to seven, spanning a realistic band. Too few misses the peak; too many tires respondents.

Key Takeaways

Gabor-Granger converts purchase intent into a demand curve and finds the price where revenue peaks. Where Van Westendorp maps perception, Gabor-Granger optimizes the number that actually shows up on the invoice.