business, learnings

Pay What You Want vs Fixed Price


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P1020545
Norden Farm in Maidenhead where I volunteer

I volunteer regularly at a local arts centre and recently when I was stewarding for a jazz gig, as we were going for a break, the leader of the band announced that they had a few CDs of their music to give away and patrons could pick one up as they left and pay whatever they felt like. As I stood by the door, I watched as nearly every single patron pick up a copy and drop more than just a few coins (many in notes). So much so  that I am certain the band shifted more copies and made more than what they’d have if they had charged a fixed price.

The duty manager endorsed my view when she said that each time the patrons were offered a chance to pay what they wished to, the band always g0t paid more. She’d seen it happen several times in Edinburgh during the Fringe, at theatres which were free to enter but charged to exit. And invariably, the acts made more at the door than they would have at the box office.

And barely 24 hours after this incident something else happened. I was at a networking event, when someone who was very interested in what I had to offer asked me how much I charged. And upon hearing my response, a third party who had been listening to our conversation said, ‘I lost interest the second you mentioned your prices’ (charming!). His response had me wondering, not for the first time, if this kind of a reaction to prices was something that was unique to the arts and businesses working in the arts. And if this was how people reacted to other lines of work – say, trades, finances, law – as well.

I am tempted to do an experiment. What if, for a limited period, I told clients that they could pay what they wanted in return for a questionnaire that explored the reasoning for their payment? The results could be interesting. Or would I just be shooting myself in the foot (and the purse)? What do you think?

6 Comments

  • great article ..there is definitely a link between people’s generosity when they are ‘forced’ or ‘choose’ to do something 🙂
    Making your own assessment as to the value of something might be good for the arts, but I too am curious as to whether people would pay me what ‘i think i am worth’ ….or pay me according to the pennies left at the bottom of their handbags (lol)
    I have a feeling that professionals selling services need to tell people what they are worth, because the mind is used to judging the VALUE of something by the price (old ford escort VS rolls royce)

  • Thank you, Joy for your kind and thought-provoking response.

    In my case, I do wonder if I had the price conversation too soon. Perhaps I should have waited to understand more and explained more what I had to offer before saying what I was charging. After all, with the band scenario, the leader mentioned the CDs being up for sale at the end of the first act. So the audience knew the value of what they were getting. I think the results would have been vastly different if the CDs had been up for sale at the beginning of the concert.

    Also, agree with you on how the mind us used to judging value based on price. I am still tempted to do my experiment though…

  • …worth having a go, nothing to lose, everything to gain I guess. I’d be interested in the results. (But I find it hard not to respond when someone asks the price).

  • Hi Abhi
    You are right!
    The formula of VALUE = BENEFITS – PRICE reminds us that, unless the buyer is convinced of the benefits of what video brings to them, then they will either get to price too early, or object when you do.
    There are so many benefits to video, and your job is to highlight them in a way that is authentic to you, then close with price and details.
    The idea of Customers paying what they think you are worth, after you have delivered fab value, is worth a go. I have done that before, but in a guarantee up front . Let me know if you have any more questions. I LOVE the value/price discussion.

  • Thank you, Amanda for weighing in on the discussion. And what would you put up as a guarantee up front?

  • Thank you, Joy. I have a few more thoughts swirling in my head which I will elaborate in another post.

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