Pay What You Want (PWYW)

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This short module looks at the pricing model that allows customers to choose the price. It talks briefly about the advantages and disadvantages and lists some examples.

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Pay What You Want (PWYW)

  1. 1. (Stanford BUS-21) Martin Westhead Mastering Marketing Donations / Pay What You Want (Can) How to make money by giving things away
  2. 2. Overview  Pay What You Want Model  Examples - Radiohead “In Rainbows” - Disconnect.me - Canonical (Ubuntu) - So All May Eat Café and Panera Bread - Vimeo Tip Jar
  3. 3. Pay What You Want (PWYW)  Buyer chooses price – sometimes $0  Includes “Tips”  Attractive to buyers - Avoids “buyers remorse” - Removes adversarial nature of price setting  For seller - Avoids costly (risky) pricing decision - Addresses varying value perceptions and price sensitivities in buyers
  4. 4. Pay What You Can (PWYC)  Sometimes used synonymously with PWYW  Often more charity / social causes American Museum of Natural History
  5. 5. Radiohead “In Rainbows”  Early download offered as PWYW  What did people pay? - $0 - $20 - Average $6  Most commercially successful Radiohead Album - 3M copies - $80 deluxe set 100K - 30K copies in first week (even 2 months after PWYW) - 1.2M tickets sold for tour
  6. 6. Disconnect.me Privacy solutions company
  7. 7. Tip Jars  Launched by Vimeo in 2012  Content creators easily add a Tip button  85% goes to creator  Plus and Pro only  Also offer Paywalls and Ads http://www.reelseo.com/vimeo-ushers-video- monetization-tip-jar/
  8. 8. Donate buttons  Available on - Blogs - Open Source Downloads  Integrations with CMS - Wordpress - Jumla - Drupal - Tumblr  Software download issue - Often see value long after donation opportunity has passed
  9. 9. Canonical  Creators of Ubuntu - Linux distribution  Downloads are free but…  Encouraged to pay for feature requests
  10. 10. So All May Eat (SAME) Cafe  Non-profit in Denver, CO  Pay What You Want Restaurant  “Making Healthy Organic Food Available to all”  Accept an hour of work for food too  Costs - $2,000 a month for rent - $2,000 for the food - Average meal costs $2  Revenues - Average donation $3.66 http://en.wikipedia.org/wiki/SAME_Cafe
  11. 11. Panera Bread  Chain of bakery-café restaurants in US and Canada  2010 created Panera Cares  CEO Ron Shaich based the idea on SAME Cafe in Denver, Colorado  Dearborn, Michigan; Portland, Oregon; Chicago; and Boston  Each site serves 3500 per week http://en.wikipedia.org/wiki/Panera_Bread
  12. 12. Overview  Pay What You Want Model  Examples - Radiohead “In Rainbows” - Disconnect.me - Canonical (Ubuntu) - So All May Eat (SAME) Café and Panera Bread - Vimeo Tip Jar

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