Community Magazine

Does Pay-what-you-want Really Work?

By Eemusings @eemusings

pay only what you wantAs a business model, it’s apparently a more successful technique than you might think.

When I switched to self-hosting recently, Akismet wasn’t automatically enabled on my new blog. I had to go register on its site to get a key, and decide how much, if anything, I wanted to pay for it. I think the wording on the page was ‘what is Akismet worth to you’? There was a bar on a sliding spectrum, which defaulted to somewhere in the middle (something like $36). As I dragged it down to $0, I felt a slight twinge of guilt. But the pang didn’t last long, given that I was used to having it for free already.

There’ll always be customers who abuse privileges. But apparently at restaurants that offer pay-what-you-want, a lot of people willingly pay more than the recommended price. (That makes up for the other who don’t fork out for the full amount.) After all, nobody wants to look like a cheapskate.

I can’t say I’ve ever visited one of these restaurants – if anyone knows of one in Auckland, holler! – but I definitely would be too embarrassed to pay much less than I thought it was worth. (That said, I do think restaurant food is often heinously overpriced and that our portion sizes are way too stingy.)

I did, however, head along to one of the night shows at the recent International Buskers Festival, which I think ran for about 2.5 hours, though we only caught the last hour. They put on quite a strong sales pitch right at the end, reminding us that our tips would be split between all the acts ($20 per person would be a good contribution, I believe they suggested) and that an equivalent ticketed show would cost about $100; after all, some of the things we saw were really amazing – tricks with bikes, pogo sticks, incredible balancing stunts, fire whips, sword swallowing, and more. Predictably, most of the crowd gapped it pretty quickly straight after the last performer. It was a strong reminder of how we value – or don’t value – what we don’t pay for. Thing is, I doubt many of us would have paid to go see these street acts otherwise. I know I wouldn’t have, and I’m thankful to Auckland City for organising the public show for the 13th year. FYI, all I had was a few dollars in change, so I certainly didn’t stump up $20 myself.

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