In the last couple of years there has been a pricing strategy which is becoming more popular amongst different companies. The ‘pay what you want’ pricing strategy concerns the freedom of consumers to pay any price they desire for a certain product or service. Certain companies who have implemented this pricing strategy include a floor price or set a minimum price for their products and/or services to be able to pay for the costs that they make. Thus, the question that comes in mind is if these companies who use this pricing strategy stay in business as long as other companies who use other pricing methods. I know that, in order to answer this question, different variables need to be researched.
As stated before, there are several companies who use the pay what you want pricing strategy. Headsets.com has offered their products to their consumers with no price attached to the products. The CEO states that the goal of implementing this price strategy is to lower the boundary for consumers to try different products. It interesting to see that managers are experimenting in different ways to encourage their consumer to try different products. Product which a consumer would have never chose in the first place. There are also services in which this pricing technique can be used. Jessica Martin is the owner of a consultancy company who uses this pricing method. For an two-hour business strategy session the customer can pay whatever he/she desires. She states that this pricing method encourages consumers to, early in the problem-solving process, ask for the advice of an experts. From my point of view this pricing method can be very beneficial in this situation. Maybe certain companies who would never ask for the opinion of an expert are more willing to grasp this opportunity with both hands.
Another company which also uses this pricing method is Bonvoy adventure Travel. Although this company let’s their consumers pay a price that the consumer have chosen, the consumers are not completely ‘free’ in determining the price of the trips. Bonvoy Adventure Travel offer different prices for different domestic places that a consumer can chose from.
The company that has impressed me the most is the restaurant Panera Bread restaurant who let their consumers pay any price for each item on the menu. The consumers can also chose to pay nothing at all. Interesting is to see that this restaurant uses the profit to help stabilize the community by helping homeless people finding a shelter, trying to find jobs for the unemployed etc. They attract more people in paying a ‘regular’ amount for the food, by ‘giving’ back to the community. The question that I asked earlier about the longevity if a company that uses the pay what you want pricing strategy is answered by the owner of Panera Bread. He states that his restaurant stays in existence by the community, if they start caring less than there will be an end of the existence of the restaurant.