Name your own price…
October 31st, 2007 by Andy Didyk
In the world of marketing, you can score a double-play whenever you can create a promotion that is so noteworthy that more attention is drawn to your methods of promoting than to the promotion itself. A few months ago, the alternative music group (an overly simplistic label on my part) Radiohead released its first major album after parting with its record label. The album is available for download for whatever price its listeners are willing to pay, which was and is an amazing concept for artists and marketers everywhere. Check it out…it’s an interesting site and a great listen.
Of course, this model is only truly economically viable if you are fairly confident that you already have a strong, loyal audience that will carry the majority of the financial burden.
Steve Thorson, one of my friends and a co-worker from a previous life, is a designer for Paste Magazine’s website, and he let me know that Paste is using the same model to sell a year-long magazine subscription – you pay whatever you feel the magazine is worth to you. 11 issues, plus 11 full-length CD’s full of the latest and greatest music for progressive tastes. What’s great about this promotion, is that it’s also a gauge of the loyalty of its current subscribers, as Paste is allowing renewal subscribers to get the same deal. As an added incentive, Paste is highlighting those who pay more than the $19.95 for a standard subscription rate (although Steve tells me this experiment has yielded an unexpectedly high number of subscriptions at $19.96 by those who just want to be featured in the magazine).
This is a great deal for consumer, and a great deal for Paste, as they can expand their subscriber base to uber-frugal people like me that wouldn’t normally pony up the 20 bucks for a magazine about music (yes, guilty, I paid a dollar, but I know that Paste will make it up in ad revenues). Asking people to pay what they want is the next best thing to giving it away for free, and it offers the added benefit of giving you, the marketer, a very real picture of what your value is to your customers.
>>UPDATE: Steve just let me know that the slew of subscribers at $19.96 was inaccurate (and third-hand) information. So far, only one person has done that. On the upside of things, he said the highest price someone has paid so far is $70. So now, I can officially feel less guilty about only spending a dollar.
This entry was posted on Wednesday, October 31st, 2007 at 2:16 pm and is filed under branding, communication, consumer products, marketing, user experience. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 1st, 2007 at 2:10 pm
I’m fascinated by that concept, although it’s not new. Public broadcasting has been using a similar model with their regional membership drives and sponsorships, encouraging people and businesses to support their local NPR/PBS stations with any amount they can afford, which is also a way of discovering the value. Asking people to pay according to value is also playing into personal guilt, especially with public broadcasting which is available to anyone with a TV or radio whether they are a member or not.
I’m looking forward to reading more. Thanks for the insights.
November 1st, 2007 at 5:44 pm
Steve, thanks for the additional thoughts. I think there are similarities between the fund raising efforts of public broadcasting (of whom I am a massive consumer and a minimal financial supporter, guilt, guilt) and the promotional strategies of commercial ventures. I guess the biggest difference is that commercial entities are out for profit, and rarely give the content away for free if you don’t pay something.