A pricing technique getting more traction lately is the so called "Pay What You Want".

But which are the benefits & risks of this method?

What have researchers found?

Will it be useful for my business?

THURSDAY THREAD - "Pay What You Want"

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"Pay Whay You Want" (PWYW) is a pricing technique in which the customer purchases a product or service and pays any amount he or she wants.

It can be 0. It can be more than the regular price. You let the customer decide.

Now, from using PWYW, researchers have found that..

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- Only few customers pay nothing or more than the regular price (Doesn't apply if you promote it as "free").

- The majority of the customers pay LESS than ther regular price.

- The number of sales and customer INCREASES using PWYW.

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- PWYW is more useful for services or products with low variable costs.

- PWYW reduces price competition.

- And finally, it generates higher word of mouth and customers are more willing to buy back from you compared to free sampling or discounts.

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So, basically, remember:

Pay What You Want is a method that helps brands focusing on growth, but it's hard to establish as a base strategy.

If you are starting a business or launching a new product with low variable costs, give it a try!

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