April 21, 2010

WWIF #11: Pay What You Can

Many performing arts groups have found success attracting new audiences by offering "pay what you can" performances.  A select number of dates are provided when tickets can be purchased in this manner.

The band Radiohead's offered a well-publicized "pay what you want" pricing strategy for individuals downloading their new album.  Paste Magazine's made a limited time offer for new subscribers to do so at whatever amount they wish to pay.  Many museums have long had "suggested donations" for admission.

What if associations offered "pay what you can" opportunities for a professional development program ... conference, webinar, or other initiative?

Such an approach might most effectively be used when:
  • You want to attract a specific audience to an event they otherwise probably would not attend. While younger professionals might immediately come to mind, this really could be any desirable but under-represented audience for a specific program.
  • You're offering a new program and are unsure of the level of interest it might generate.  Make it easy for people to say yes to your experiment when the value proposition is a bit uncertain.
  • You're locked into a conference or webinar that is struggling to attract a critical mass.
A fair amount of research suggests customers have a greater psychological commitment to something they purchase versus receive for free, even if the cost is nominal.

To minimize your financial exposure you could place a few limits on your offer:
  • Art groups often use the offer during previews vs. the main run.
  • Cap the number of pay what you can registrations.
  • Specify use by only individuals who haven't previously registered for a similar event so you aren't cannibalizing your core audience.
And finally, I'd make it clear what the normal costs are for registration, and perhaps over time, the average fee people opt to pay.  Both provide benchmarks that might help people pay more for the value they receive.

Note:  Wednesday What If is a weekly feature applying the "what if" mindset associated with abductive reasoning or logic in an effort to stretch our thinking about what is desirable and very frequently, quite doable.

4 comments:

Shannon Otto said...

I think your second bullet - on offering a new program at a "pay what you want" rate - is a fantastic point. Even if people pay just a little, they may be more willing to commit, like you said. Giving members the chance to decide how much they can pay for a new program could be an extremely effective way to get them interested, allowing staffers to gauge interest levels. I'd be very curious to hear from associations that perhaps already do something like this, and what its results were.

Jeffrey Cufaude said...

Thanks for your comment Shannon. I concur that bullet #2 has lots of potential. A variation on it would be to invite a select group of folks to attend with the requirement that at the end of the program, they pay for the value they think they received.

Dave Lutz said...

Jeffrey, interesting post! I like to recommend the idea of putting out a money back guarantee over a "pay what you can" model. Another approach is to qualify and help attendees that are having a financial hardship or offer payment plans. Yet another approach that I think more associations will try in the coming year(s) is some sort of affiliate program. This may include incentivizing speakers and other influencers to help promote your event for financial gain or subsidy.

The pay what you can model could definitely rub some of your loyal attendees the wrong way...but trying new and different models for attendance acquisition is good stuff!

Jeffrey Cufaude said...

Thanks Dave. I like the money bakc guarantee idea as well (though it is so common nowadays I don't know what its effect might be), but you can't get your money back if you weren't going to attend anyway.

I think this approach has the potential to attract new attendees and to address your concern about offending the loyal, you can see I pointed out it might be important to offer this to first-time folks for that very reason.