To buy or not to buy, that is the question…the question we as consumers have to answer every day.
And it’s not always an easy answer.
Some days you might come across something you really want—like software to help your biz run smoothly—but it’s out of your price range. And instead of pulling the trigger, you reluctantly take the item out of your cart.
As a creator who sells products, your customers face the same predicament regarding your offerings: should they buy or not? And while you can cross your fingers and hope most of them buy, the reality is not everyone will.
So how can you encourage more people to pull out their credit cards and purchase your products? One strategy is Pay What You Want (PWYW)—a unique pricing method that lets consumers name their price for the products you sell.
The difference between Pay What You Want and traditional pricing
Traditional pricing is easy to grasp: the seller sets a price, and the buyer has to pay the set price to get the product. Every time you go to the mall or buy groceries, you interact with traditional pricing.
Pay What You Want pricing takes traditional pricing and flips it on its head. Instead of sellers setting the price, buyers steer the ship and pay whatever they want. Social Autie created a course on burnout with the PWYW method. Buyers can input however much they want to pay (including $0).
However, you don’t need to give your products away for free using PWYW pricing. Some creators set a minimum price—known as price anchoring—which customers must pay. For example, Rachel Estapa with More to Love Yoga lets customers set their own price for her yoga classes but requires people to pay at least $10.
While PWYW may seem like a new and novel idea, it’s been around for many years. In 2007, the alternative rock band Radiohead released an album under a PWYW method, along with a digital tip jar, earning the band more money than any of their six previous albums. Paste Magazine shortly followed suit, offering annual subscriptions on a PWYW model. Even grocery stores, like Feed it Forward in Toronto, are testing PWYW pricing.
And if you’re a ConvertKit Commerce user, you can set up your own PWYW product in minutes (we’ll show you how later in the article)!
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How a PWYW pricing model will help your biz
PWYW pricing might leave you scratching your head and asking whether it will actually benefit your business. After all, if people have the option to get your products for rock bottom prices, what incentives do you have as a creator to offer PWYW?
1. Increased earnings
Believe it or not, you might make more money with Pay What You Want pricing. Take writer Linda Formichelli, for example. She earned ten times what she normally earns after introducing PWYW pricing for her online course about writing for magazines. PWYW puts your customer in charge, so while some may pay less than what you’d expect, others may pay more.
But simply giving customers the option to pay what they want won’t magically increase your earnings. Fernando Machado and Rajiv Sinha conducted a study and found people are willing to pay more when they feel a connection to the business. Before introducing PWYW pricing, take time to develop a relationship with your audience.
Your email list gives you direct access to those who are fans of your work, making it the perfect medium to grow strong relationships. Send out frequent emails to your list with:
- Exclusive content like promotions or behind-the-scenes that give subscribers a unique look into your business
- Bits of knowledge to showcase your expertise and teach your audience something new
- Questions that encourage subscribers to reply to foster two-way communication and let your audience know their opinions are valued
To save time, build and schedule email sequences to send the above emails. With every value-packed newsletter you send, your audience will feel more connected to you, increasing the chance of success when you choose to introduce your PWYW product.
2. Research for pricing
The age-old question: how should I price my products? Price your offer too high and miss out on customers. Price it too low and leave money on the table. Finding the sweet spot is necessary (but difficult) when pricing your digital products.
Using PWYW, eliminate the guesswork and let your customers tell you exactly how much they’re willing to pay.
You aren’t leaving money on the table, and you’re less likely to miss out on any buyers.
3. Greater accessibility
PWYW pricing eliminates purchasing barriers and makes your offerings accessible to a wider range of people.
Alexa Brachvogel, the owner of digital marketing agency Blüm Agency, sells marketing courses using a PWYW price model:
“Products with accessible price points allow you to reach customers that would otherwise be excluded from participating in your offerings, and these products can act as a “gateway” to further purchases and engagement with your brand in the future.”
With PWYW, customers get a taste of your offerings and might choose to buy other offerings. Alexa also notes the useful feedback PWYW customers provide, feedback her agency may otherwise not get:
“Pay What You Want customers tend to ask slightly different questions than [our] agency clients, which helps us tailor our content to better serve them and improve our offerings and customer experience over time.”
As you open your offerings to a new audience, they’ll provide a unique perspective you can use to grow a stronger business over time.
When to use PWYW pricing
1. You have a new product but don’t know how to price it
If pricing your products feels like a shot in the dark, use PWYW to gauge what your customers are willing to pay.
ConvertKit creator and photographer Brendan Williams, sells Photoshop brush packs, actions, and photo editing presets on his website. He’s used PWYW pricing in the past to help him determine how to price his products:
“The Pay What You Want model helps with shifting to traditional pricing by knowing what people are willing to pay for my lower-tier products. Based on the high and low amounts people voluntarily paid for the products with the PWYW model, it gave me a ballpark for deciding on a fair price. This was especially useful for my smaller info products and digital assets that I wanted to charge for but wasn't sure how much.”
After getting a good feel for what customers will pay, switch to traditional pricing. Customers will find your price fair, and you’ll feel confident that it’s not too high or too low.
2. You want to increase sales for an existing product
Promotions are a great way to boost product sales. But instead of running a typical promotion—like a percentage off—experiment with a PWYW promotion and let customers choose their discount.
Here are two situations when a PWYW promotion can boost sales:
- A product isn’t selling: Maybe you’ve priced a product incorrectly, and it’s not selling. Use PWYW to see if the price you initially chose aligns with what buyers are willing to pay.
- A pricey (but popular) product: Lower the barrier for a brief amount of time so people who can’t afford your product at its regular price get the opportunity to buy under PWYW.
3. You want to raise donations
Pair a PWYW promotion with a good cause and donate a portion of your PWYW funds to a charity. To encourage buyers to increase the amount they pay, the charity should be one both you and your audience care deeply about, so make sure it’s clear on your product’s page which organization will receive your donation.
Ev’Yan Whitney hosted a talk and donated a portion of sales to the Embodiment Institute with her PWYW product.
On top of helping a good cause, aligning your brand with social causes increases the chance people will buy from you. Accenture conducted a global survey and found 50% of people want to buy from brands that support causes that align with their own values.
When not to use PWYW pricing
1. You’re selling a high-ticket item
It’s risky to let customers set the price when selling high-ticket items. To minimize risk, you can set a minimum requirement, but then your item loses the novelty of PWYW.
Here’s an example. Let’s say you’re booking flights for an upcoming trip, and the airline lets you pick your own price for flights—how exciting! But when you go to book, you see there’s a minimum requirement of $1,000. This is understandable—the airline needs to cover the costs to fly the plane. But suddenly, the excitement you felt to choose your price is gone. You might even feel a bit of resentment.
The same applies to your high-ticket items. Keep PWYW pricing for mid- to low-priced items and offer customers more flexibility to pick their price.
2. For time-intensive services
PWYW works wonderfully for products where you don’t need to spend much time (if any) helping the customer post-purchase. Think of things like ebooks, printables, or short coaching sessions.
But for offerings requiring hours of your time, you risk lowering your hourly rate if you let clients pick their own price. For example, if you’re a graphic designer, you likely don’t want to offer a custom branding package using PWYW. Instead, you could offer one-hour brand consultations using PWYW.
How to set up a profitable PWYW product
Are you ready to dive into the world of PWYW pricing? We’ll help you get up and running in a matter of minutes.
1. Choose your product
Pick a product (or create one) with high profit margins—like a digital product—and a low time requirement—like short coaching sessions. This way, both you and your customers come out winners.
Marketing agency owner Alexa Brachvogel shares that businesses can also adapt current products to fit a PWYW model rather than create new ones:
“While not every product or service can be fully accessible based on the amount of time, effort, or materials required, there's always a version of a businesses' offerings that can be formatted and shared with a broader audience at a more inclusive price.”
If you have a popular offering that you don’t think is the best fit for PWYW (but you’d still like to give a try) why not tweak the product? For example, rather than sell an entire course under PWYW pricing, choose some key modules and offer those as PWYW. Plus, your PWYW customers might see the value in your products and choose to purchase the full deal later.
Pro tip: Although we’ve given some guidance on which products work well and which don’t with PWYW pricing, we recommend experimenting. Try different products, test different pricing methods, and see what works best for your biz with your customers.
2. Decide how much control to give your customers
Although PWYW puts your customers in the driver’s seat, you can still choose how much control they have.
For a true PWYW experience, customers pay as little as $0 up to however much they’d like. Giving customers full rein is useful when you aren’t sure how much your product is worth. But keep in mind customers might feel overwhelmed trying to set a price when they aren’t given any direction. If you notice people aren’t buying your product, try adding a line to your product’s description suggesting how much to pay, just like Melanie Midegs does:
If you prefer more control, set a minimum price for your product. Price minimums might turn some people away, but they ensure you won’t get less than your specified amount. Putting a minimum is useful for items like coaching, where you have to put time towards the customer after the purchase.
Nurtured by Nature sells coaching but sets the minimum PWYW price to $165. While some customers may pay more, Nurtured by Nature won’t get any less $165.
3. Set your product up in ConvertKit Commerce
If you aren’t techy, setting up an ecommerce shop with your products is a headache on its own. But trying to program PWYW with your payment processor is an even greater challenge. Using ConvertKit Commerce, you can set up your own PWYW products within a few clicks. Here’s how.
After logging into ConvertKit Commerce, click Earn > Products.
Then click Create a product.
Enter a name for your product and select Pay what you want for the pricing method. Add a minimum price or leave the box blank if you don’t want a minimum price.
Next, choose which type of product you’re selling: a digital download, access to a paid newsletter, or something else. If you choose to sell a digital product, you’ll need to upload the product. After purchase, ConvertKit will deliver the product to your customer automatically.
Then customize your product’s URL and click Create Product.
Next, customize your product page, checkout and confirmation page, and receipt email. You can add your own imagery, adjust the colors to match your color palette, and select from different fonts to match your brand.
After you’re happy with how each page looks, click Publish. ConvertKit will give you a unique product link to share with your audience, along with code to embed your product on your website to share your new PWYW product with the world!
4. Decide if your PWYW produce will be ongoing or a limited-time promotion
It’s entirely up to you how long you let customers pay what they want. Keeping an ongoing PWYW pricing structure makes your product accessible to everyone at all times, like this course for real estate agents:
On the other hand, making your offer PWYW for a limited amount of time generates buzz and excitement. Neurodivergent Narratives makes it clear on their sales page that their PWYW workshop is only available for a limited time on August 29.
Experiment with both options and see which results in more happy customers!
Promote your PWYW product and start earning today
At first, you might worry whether you’ll go broke letting customers choose how much they pay for your products. But it’s safe to say there are many ways to experiment with PWYW pricing and still earn a pretty penny.
Stop guessing and start feeling confident with the way you price your products. Use Pay What You Want pricing to attract more customers and nail down the prices people are willing to pay for your offerings.
Sign up for ConvertKit Commerce and see just how much you’ll earn with PWYW!