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Pay-As-You-Wish Pricing

A few years back, we visited a beautiful lake called Lake Trubsee, on Mt.Titlis in Switzerland. This was one of the stops on the way up the Mountain in a cable ride. Looking at the beauty of the lake from the cable car window, we decided to take a pit stop at the lake. There were hammocks and row boats all available free of cost. Rowing across the lake and back along a fantastic backdrop of the mountain was one of the best experiences of our trip. Even though renting the row boats was free, the experience was so pleasant and joyful that we couldn’t resist and dropped a $20 in the tip box and wondered along our way back if we should have paid more.

Whenever I think of “Pay-As-You-Wish”, I think of the wonderful experience I had at the lake and how that prompted me to pay for it even though that was free. This approach usually lets the customer set the price for the value they perceive of the product or service being used. Of course, this is not viable for all business models and there is a risk of losing revenue as a result of customers not paying anything at all.


Another successful example of “Pay-As-You-Wish” pricing model is when Radiohead released the album “In Rainbows”. They experimented with “Pay-As-You-Wish” pricing and ended up making more digital income than their entire albums put together even though just a percentage of fans ended up paying for the album. This success can also be attributed to the already established brand value of the band as well as the loyal fans who were willing to pay something as they saw the value in the product being offered.


We often see NGO’s and Public Radios have fundraising events and donations that is essentially their revenue model. All of these are based on “Pay-As-You-Wish” model. Another important tactic or factor in this type of model is Price Anchoring. Whether online or via mail there are some options present to donate, which essential act as price anchors.


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