Willingness to pay or WTP is the maximum amount or price that a customer may be willing to pay for a company's product or service offering. This metric is represented in a dollar figure or as a price range. This metric helps companies understand that potential customers are always willing to pay less than the decided price.WTP can be calculated as = the maximum price a customer is willing to pay/ product or service price
Companies can measure willingness to pay through various modes like market research, surveys, and experiments. Once the data is gathered they can estimate the WTP ratio for further analysis.