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Two weeks ago I attended, via simulcast, Andrea Lee’s Wealthy Thought Leader event. And one of the most inspirational, soulful, thought-provoking presentations was on the topic of pricing — and something innovative known as the Pay What You Can Model, presented by Tad Hargrave.
The basic premise is this: you offer a product or service, but instead of telling people what to pay, you let them pay what they want. Now I can hear all the red flags going up: “people want everything for free, how would that ever work?” But it’s a very interesting shift, as Tad explained, from a “trust me and pay me upfront the price I set” mindset to a “I trust you will pay me what this piece of work I’ve given you is worth to you.”
A few takeaways I got from Tad’s talk and from the WTL conversation afterward:
- Pay what you can works best in certain circumstances. One example is a stand-alone workshop (i.e., with no up-sell or follow-up). Another example would be an ebook or a teleclass. One-on-one coaching or consulting would not be a good fit for this model.
- One critical component is to establish a “market price” range. That way people have an idea of what something similar might be worth — they don’t feel guilty thinking they didn’t pay enough (or too much), and you don’t feel woefully undervalued.
- The beauty of this model is it truly honors the value people receive from your work…which may be very different for one person than it is for another, at the very same workshop. And so they can pay accordingly.
- Use the pay-what-you-can model strategically. Perhaps you are moving into a new market, or a new area of expertise. Or you want to try out a new idea and see what the response is. It’s a perfect way to test the waters, get some market feedback, and get paid at least something in the process!
This only touches the surface of what was discussed, but I hope you find it as intriguing an idea as I did! What do you think? Will you (or have you) tried or experienced pay-as-you-can pricing? What was your experience? Please share in the comments below!
Terri Z is
The Solo-CEO: a self-employed internet marketing consultant to solo entrepreneurs, freelance writer, and grassroots promoter of the
solo entrepreneur lifestyle. She runs www.Solo-E.com, the resource website for solo entrepreneurs which attracts thousands of visitors monthly from over 100 countries on six continents.
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