These guidance notes describe good practice for conducting robust 'willingness-to-pay' (WTP) surveys in small towns, using the Contingent Valuation Method (CVM), as part of a demand-responsive approach to the supply of services. The urban water sector in low- and middle-income countries requires good quality data to justify future investment proposals; develop a better understanding of user perceptions and preferences; support the selection of preferred service options; and to set out the scope for future tariff increases. CVM surveys are a reliable means of generating such valuable information. Key areas covered in this book include how to design and implement a WTP survey, as well as how to best use the survey information to inform project design and policy-making. Its aim is to encourage wider use of WTP surveys, particularly for small towns where it is inappropriate to merely assume which service options users prefer and are willing to pay for. This book has been developed as part of the DFID Knowledge and Research project R7852 Optimised Management of Watsan Services in Small Towns.