I was doing a bit more research tonight into ‘Pay What You Want’ (I talked about it over here in It’s time to step outside the wire) and I found your website where you created a course that you were offering with the ‘pay what you want’ model. I was interested, so I read some more.
You were pricing 3 different elements of the course – $97, $147 and $297. You promoted the ‘pay what you want’ method for a reasonable amount of your promotion page, but then you finished with words to the effect of:
“I will always reserve the right to turn down your offer to pay what you want if it doesn’t match what I consider its value.”
At that point I laughed. You lost me. You don’t want people to ‘pay what they want’ at all! You want people to pay what YOU want. It looked like all you were doing is trying to cash in on the ‘pay what you want’ interest out there.
Allowing people to pay what THEY want allows more people to access your product or service than would normally be able to. If you’re selling something worth $500, for example, you’re only going to get reasonably wealthy people buying it. But if you allow people to pay what they want (what they can afford or even choose to pay), even if it’s just $1, you actually end up with the potential to increase your income.
You encourage people to pay you for the value that you’re creating or providing.
Not only that, you increase your exposure to more people by allowing more people to buy what you’re offering, especially those that might not normally have been able to afford it.
This results in more clients or customers appreciating what you’re doing. More people talking about you. More people promoting you. More money being made by you.
And if you offer something of value, then you encourage them to buy more from you, to pay you more next time, and to reward you for the value you’re giving them.
But when you disguise a fixed price as ‘pay what you want’, you make me laugh. You obviously don’t get it as you remain fixated on your fixed price. It makes me feel that you don’t trust the model well enough to just let go and let people pay you what they think you’re worth.
And that’s likely part of your problem – what you’re worth. You don’t see your own worth.
Maybe you don’t think you’re worth very much at all, so you’re afraid they’ll confirm that. Be holding on to some form of ‘fixed price’ control, you feel like you’re controlling the value others might see in you, because you don’t see that value yourself.
And yes, in talking to you, I’m talking to myself. I’m seeing in you what I need to see, so that I can see the value in it for myself.
I thought last night about offering web hosting services to a business client when I was creating a proposal for them, but I ended up offering three package deals they could choose from. They ended up choosing the cheapest of the packages. It was still a win, but…
What would have happened if I offered my services without a price, and instead offered it to them via the ‘pay what you want’ model? They may have paid even less than what I originally wanted.
But they may have paid more.
If a potential client or buyer sees value in what you’re offering, they might just pay you more than you thought they would.
But you have to be providing value for them to see it themselves and pay you accordingly.
I think so few people in this world today provide anything of value any more, that if something comes along that forces them to actually provide value, they fear it. They don’t want to do the extra hard work to provide the real value in their work, when they can rely on fixed prices as an attempt to justify the value.
“Look, see? My work is priced at $500 – that’s its value!”
I really like the idea of saying, “Pay me what you feel it’s worth to you.” Because that encourages me to work harder.
I’ve enjoyed working as an IT contractor this past 7 years, because it’s paid me high amounts of money in exchange for high expectations from the clients for quality of work and exceptional performance. I’ve had to earn the high income. I’ve had to prove my value, every single day, or I’d get fired. My contract would be terminated. I had to avoid that from happening!
It was hard work, but I loved that approach. I loved the inspiration and incentive to do the best that I could.
And I can see that Pay What You Want is another element of that, to inspire and encourage me to do the best that I can, in order to encourage my clients or customers (or subscribers) to pay me MORE of what they want, because of the value I’m giving them.
We all end up happier as a result. Win-win. And that’s why I intend doing things with Pay What You Want.
I’m going to be revising my proposal to the business client, who has already accepted the fixed price contract. But I’m going to offer it to them again with the new conditions, that they can pay me what they want. They know what I originally wanted (which they accepted), but I’ll offer them the opportunity to get it cheaper.
In regards to hours spent working for them to provide them with services, paying me a cheaper rate may encourage them to give me more hours of work than they would at the previous rate. I could end up earning more as a result. (For example, $80 an hour x 10 hours is $800. But $60 an hour x 20 hours is $1200…)
It’s all about the value of what you’re providing. Fixed prices creates stagnation, while uncertainty creates inspiration, hard work and growth. I love that.
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