Pay What You Want (PWYW)
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The document discusses the 'Pay What You Want' (PWYW) pricing model, highlighting its appeal to buyers and sellers by eliminating buyer's remorse and risky pricing decisions. It provides examples, including Radiohead's 'In Rainbows', Vimeo's tip jar, and charitable initiatives like the So All May Eat café and Panera Cares. The PWYW model allows consumers to choose their price, sometimes even $0, while also encouraging donations and varying payment based on perceived value.
Pay What You Want (PWYW)
- 1. (Stanford BUS-21) Martin Westhead Mastering Marketing Donations / Pay What You Want (Can) How to make money by giving things away
- 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. 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. Pay What You Can (PWYC) Sometimes used synonymously with PWYW Often more charity / social causes American Museum of Natural History
- 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
- 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. 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. Canonical Creators of Ubuntu - Linux distribution Downloads are free but… Encouraged to pay for feature requests
- 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. 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. 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