Testing the waters

Has anyone ever heard the phrase 'testing the waters?' - in the meaning of trying out a certain approach / sales policy / etc. to see how it is received before launching it full scale?

Yes, it is a very popular phrase and you are correct in your understanding of what it means.

It may have derived from the act of bathing a child--you mix in a quantity of hot and cold waters into a tub or whatever and you dip your hand in to test the water to make sure it is not too hot or too cold.