Would a Pay-What-You-Want Pricing Strategy Work for Your Small Business?

by Gail Oliver, Small Business Marketing Consultant

I recently read an interesting article about how when you offer to customers “pay what you want for goods or services, you might be surprised at the results.

Pay What You Want Pricing Strategy

 

Does The Pay-What-You-Want Strategy Work?

As sellers of products and services, pricing is one of our biggest struggles. My marketing services, for example, are based on the time it takes me to complete.

As for my ebooks, I feel my ebooks are undervalued at $4.95, but because the Internet has been so saturated with “free” content, it has greatly devalued truly informative ebooks. A lot of new readers to my blog probably think there is nothing new in my ebooks that they can’t find for free on the Internet (they are so wrong!) but that is understandable.

So, the feeling is that when you give customers control over price, you have removed the barrier of risk. You will be surprised that most people will be very fair, willing to pay for your work. I do have to say, so many people come back to me and wonder why I charge so little!

Aren’t Auction Selling Sites Essentially Pay-What-You-Want?

Think about this pay what you want strategy. Is this what made eBay so popular, because buyers could bid on products and basically control what they were willing to pay? There are also new sites like CustomMade.com that are gaining in popularity, because, in this case, the seller can decide if they want to do the project, based on the price the buyer is willing to pay.

Might Be a Strategy to Get New and Repeat Customers

I am not saying this pricing strategy is right for all businesses, but it may be an interesting experiment to try.  Considering that 30 to 40% of your revenue should be repeat customers, it could be a good way to get initial business from a new customer and then reap the benefits of future sales from them (not to mention referrals).

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© 2012-2014 G.B. OLIVER ALL RIGHTS RESERVED

 

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1 Comment

  1. hi, i like this idea. but i sell lingerie and the amounts customers seem willing to pay are almost always much less than my cost prices. its kinda frustrating. will try this with a select few.

    Reply

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