Business Design Tip of The Day | Approaching Pay What You Want
Marketing functions under the principle that value is perceived. The seller never decides the value of an offer. We may have a hypothesis about the needs of the customer and design a marketing mix (product, price, place, promotion) to fit their need, but ultimately our buyer decides what they are willing to pay. Now what if we are unsure about how much people are realistically going to spend on our product? By testing new product ideas with a pay what you want model, you can begin to understand where your most profitable price point is as well as gain insights into the effectiveness of your promotion, point of sale, and the product itself.
Let's Consider the Following Scenario
Urban Design Inc works to help builders of new public transportation facilities. Their mission is to support this segment with relevant information and recommendations for healthy urban design solutions. However, their need to find additional streams of revenue prompts them to think of new ways to do business and they realize their site has a lot of appeal to audiences who simply want to lower commuting expenses and live a more active life. How can they monetize this audience?
One way of leveraging web traffic and learning about whether or not people are willing to put a price tag on your product is to explore a pay what you want strategy. In this exercise, Urban Design Inc could continue granting access to their pro bono beneficiaries through a login process while establishing a call to action that prompts the general consumer to valuate the product and pay the price they feel is right. Some will pay nothing, in which case you can still monetize by acquiring an email, or utilizing web tools to require the user to promote the product in order to unlock the content. Some will pay above what you would have asked for. And ultimately, you will find a price equilibrium that can inform future product design and marketing strategies.
Another way to monetize content is to develop e-books, workbooks, and other downloadable resources that would require the user to engage in the purchasing process. Overall, you should be looking at ways of monetizing the byproducts of your work. If you have an expertise at something that there's a market for, teach it! If you have developed tools and resources in the course of your work, sell them! Overall you should aim to create real value for your audience, and approach this strategy with creativity, agility, and a desire to learn about your business.
Looking for ways to create additional revenue and impact by leveraging your creativity and expertise? Our team of business design specialists can help.