Marketable World Podcast
At Marketable, we understand that the best way to learn marketing isn't through textbooks. It's by engaging with people. Throughs, strategies, and career shifts, we share the voices that drive the industry forward. real experience
From boardrooms to startups, we share unfiltered journeys, celebrate wins, and learn from missteps through podcasts, features, and events.
WE’RE CREATING A SPACE WHERE MARKETERS GROW TOGETHER
A Podcast spotlighting the marketers behind powerful campaigns. Discover the journeys, struggles, and wins of those shaping the industry.
A Marketable World.
Marketable World Podcast
Willingness to Pay - aka WTP (How Willingness To Pay Shapes Real-World Pricing)
This is one of my favorite topics because a lot of FMCG and service businesses are totally oblivious on how this playes out.
Price is not what you say; it is what the customer believes.
There is a need to understand Willingness to Pay - WTP.
Willingness to pay, or WTP, is the maximum a buyer is ready to spend for a specific product in a specific moment. It is not the posted price, and it is not the company’s cost; it is a ceiling that moves with context.
The core idea is simple: price is a story.
When the story is strong, through design, proof, and service, the price tag then makes sense. If you sell anything, this conversation will help you reframe how you set price tag, present value, and earn margin with integrity.
Understanding WTP helps you stop losing revenue in two ways: by not underpricing premium buyers and by not scaring away price-sensitive buyers. Segmentation is the bridge. Different segments carry different ceilings, shaped by income, taste, and use case.
Brand marketing and effective positioning through marketing communicationi are often the cheapest levers for lifting WTP. Creative and effective visuals, cleaner copy, and signals of care reduce perceived risk and increases trust.
As seen in airlines and hotels, dynamic pricing shows WTP in motion and at scale. As the date approaches, WTP tends to increase hence the price hikes on hotel bookings and flight tickets.
Ask yourself after every purchase you make: did you pay what it is worth, or what it was made to feel worth? That question will make you a smarter buyer and a sharper seller. When you align your price tag with their ceiling and your promise with their priorities, you unlock margin without losing trust and that is pricing power.
So if we want to know how sensitive our customers are to price changes, we need to know something about the demand generation curve. We also have factors that determine whether the demand curve for a product is steep or flat?
For example, it depends on whether the product has close alternatives or not.
Willingness to pay. What's your product really worth? Let's play a quick game. I love coffee, so let's use that as an example. Imagine you walk into a coffee shop and the menu says a cup of coffee is 3,000 naira. You think, not bad. But then you see they also have this premium Ethiopian roast for 7k. Now all of a sudden they're asking, is it really worth the extra cash? And that, my friend, is where willingness to pay kicks in. Today let's talk about something that every business should care about, but often gets wrong. It's called willingness to pay, or as I like to call it, how much can you really charge before your customers run away? WTP is the secret source behind pricing, and businesses can use it to make more money without just raising prices. SM is an entrepreneur, let's get in here, let's talk about this. This is for us. Here's the thing just because you set a price for your product does not mean that's what people are actually willing to pay. That's the mistake we make. Pricing is just not about slapping a number or a tag and hoping that they're the best, hoping that anybody will buy it. If you don't understand your customer's willingness to pay, you are either leaving money on the table, think about it. None of that is good. So let's break this down. What exactly is WTP and why does it matter? Willingness to pay is the absolute max a customer is willing to spend on your product or service. It's not the same as price. And let me give an example. Let's let's play another quick game. See here, you you go into a restaurant in a Koei, Lagos, Nigeria, right? One iron restaurant, and they bring out the bottle of water and it's a thousand naira, for example. Now, in a regular store, you wouldn't pay more than 200 or 250 for that same bottle. But because of the setting, the vibes, the experience, the music, it's just okay, right? And even the way they place the bottle on the table self, then that's WTP in action. Now let's flip that. Imagine that you are at the roadside kiosk and someone tries to sell you the same bottle of water. You will laugh and walk away that this price. But you know, what has happened there again is willingness to pay. A few things influence willingness to pay, our income value, our perceived value, alternatives that are available to you for the same product, even sometimes a very dear situation of need, maybe you're in traffic or something. If you understand WTP to help you sell smarter and make more money, not all customers have the same WTP because our social economic class and even the kind of the groups that we cater for, they're different. Dynamic pricing is real. Have you ever noticed that this flight and hotel prices, once there is high demand, the prices start to move around? They are tracking WTP in real time. If you want to lower your cost, increase what people think about it or your product. Maybe it's a better branding, maybe it's a packaging, right? So next time you buy something, think about this. Did you pay what it's worth, or did you pay what the business make you feel or made you feel is worth? As marketers, pricing isn't just about numbers, it is about psychology, perception, and now understanding your BTP. At the end of the day, pricing isn't about what you think your product is worth, it's about what the customer thinks is worth. Get that right, right? And you unlock serious value for your business and brand. Save it, share it with someone who needs to hear it and catch you on the next market table.