It is difficult to envision a scenario, specifically in the United States, where a Pay What You Want pricing strategy could prove successful for any extended period of time. In fact, only on the rarest of occasions could I see this strategy being successful even in the short term. In the article, “When does Pay What You Want Pricing Work?” three examples are provided where different companies experienced success, albeit brief, using this approach but I cannot imagine there being many more. With the exception of garage sales and the like, the PWYP pricing strategy has much more downside than upside. If I were in a position to pay what I wanted as a consumer, there are only one of two outcomes: I don’t pay anything or the offer is massively under market value. The only scenario where I would pay at or above market value would be similar to the café in Germany where customers paid 10% more because they had a personal relationship with the owner. How quickly the economy would fall if this practice were implemented on a large scale.
Suffice it to say I am not a proponent of PWYW pricing and am in fact strongly opposed to it, if for no other reason than I would be among the many to misuse it, and I still wouldn’t be among the worst of the worst. When approached from the business owner’s perspective rather than the consumer’s, I still come to the same conclusions but instead of being able to take advantage of the situation (I.e., pay nothing as a consumer), I am now the one being taken advantage of, incurring substantial losses in the process.
Cited article, “When does Pay What You Want Pricing Work?”
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