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Pay What You Want (PWYW) pricing has gotten some attention in the past few years, but most people still dismiss it as naively utopian, only suited to very special situations.
I have posted a survey of a growing body of research and real use that suggests that it has much more value than most businesses realize, in a wide range of situations. Many of you know of Radiohead, and now there is the Freakonomics movie preview, but there is a lot more to think about. A blog post with a link to this survey is at http://www.fairpayzone.com/2010/10/pay-what-you-want-still-crazy-af....
What is more, I suggest that an enhanced form of PWYW can be applied to ongoing Internet relationships, using feedback on how well people pay, to gate access to further PWYW offers as a special privilege. This FairPay process enables behavior like a freemium model that can be far more simple, fair, adaptive, dynamic, and profitable. It is especially relevant to digital content but can apply to other products/services. More on this is at http://teleshuttle.com/FairPay.
(It seems PWYW and FairPay are patterns, in that they deeply alter many other building blocks of the canvas, especially on the customer-facing right side.)
At Panera’s restaurants in ST Louis, 65% have paid the recommended price! not bad at all!
And it's close to breaking even, wouw!
Human nature is in fact what we want her to be...
Nice proposal!!! I am thinking how to use this schema of prices for an ecommerce solution we are developing, just looking to include something different.
An example of sustainable PWYW.
I see a correlation here in the Milwaukee, WI (USA) area with a food coop that has three locations (Outpost Natural Foods).
This coop provides organic food and other organic consumer goods that incur premium pricing that is in effect PWYW. One could opt for the less expensive alternatives to organics and therein lays the PWYW. The choice is to pay a bit more for organics or less for the alternatives.
The question then becomes: Pay me now or pay me later?
Organics = pay me now, and the alternative is pay me later (health and environmental concerns).
The long-term benefits to human health and the environment regarding organic food and organic consumer goods are known by the buyer who will pay this premium price (now).
The coop is sustained by its membership. The membership is sustained by the coop.
You said at the end of your post "It seems PWYW and FairPay are patterns, in that they deeply alter many other building blocks of the canvas, especially on the customer-facing right side."
I've been thinking about this too...
Care to share what you had in mind?
Thanks for picking up on my suggestion that "It seems PWYW and FairPay are patterns, in that they deeply alter many other building blocks of the canvas, especially on the customer-facing right side."
I see FP as an architectural pattern much like "The Long Tail" and "FREE as a business model," both in general, and with important similarities to key aspects of each:
FP exploits a different long tail, one that I have described as a Long Tail of Price sensitivity, to sell to buyers across the full range of value levels and price sensitivities. See:
FP also has a close relationship to free and freemium models, in that it benefits from tiers, much like freemium, and that it captures high revenue from high-margin buyers while also generating scale revenue and economies from low-margin buyers. See:
FP has deep ramifications on the right side: