A while ago I read an interview with a speaker and consultant who tells his clients to pay what they want. He established trust on the front end by telling clients that he trusts that they’ll pay him what he’s worth, and more often than not, the trust is returned on the back end. In fact, he’s often paid more than what he would have charged with a standard rate.
Last week, the news broke that a St. Louis Bread Co. (known as “Panera” to the rest of the country) in Clayton, where I work, was using a similar pricing scheme. This one Bread Co. is now officially a nonprofit, as they’re asking customers to pay what they want. There are no registers, just the equivalent of a tip jar on the counter. I’ve heard that lines have been out the door, and people are pretty much paying the “correct” value.
I’m fascinated by these pricing models. Note that they’re not free (I generally don’t support freemium models for online services). The consultant and the Bread Co. are asking people to pay what they think their services and goods are worth.
There’s an institution that I think could truly benefit from this type of pricing strategy: art. Specifically, art in restaurants.
How many times have you been eating dinner in a restaurant, and there’s a beautiful painting hanging over the table. You think, “You know, I would love to have a piece of real art in my home.” So you check the price tag. And it’s $400.
Now, an artist will say that that’s what the painting is worth. Sure. Maybe it is. But (a) you haven’t sold the painting, so it’s probably not priced correctly, and (b), the artist is losing trust by putting a perceived overinflated price on the painting. The same would happen if the artist undervalued the painting–if the price were $15, you wouldn’t think it was special. But it’s so hard to find that sweet spot when you’re dealing with an array of customers.
My suggestion? Instead of putting a price on the painting, put the following information:
You Name the Price
frame + supplies = $170
time to paint = 23 hours
contact: monet4eva@gmail.com
Now that would catch your eye, wouldn’t it? If the painting is appealing to you, you’re fairly likely to contact the artist to name a price. You ensure that you’re not losing money on the frame (better yet, don’t frame it), and you add a ton of value by informing the customer how many hours the painting took to create. As the painter, you retain the right to reject an offer, but at least then you’re in touch with your customer. You’ve established a relationship, and maybe you could suggest a similar–but smaller–piece.
What do you think? Where else would the “pay what you want” model work?
MOVIES! Some just don’t worth the $8-$10 per ticket.
Hm…movies would be pretty tricky. I think the impetus is on you, the consumer, to research the movie in advance to see if it’s worth your time and money.
First off, I love your approach on how to sell art. Quite frankly every artist should do this.
However, in artists’ defense, sometimes the over inflated prices is so the piece can be viewed but not sold. If a piece is being displayed somewhere, often times the artist is asked for a price for insurance purposes by an establishment. They won’t necessarily get the amount they priced it at if some tragic event occurs to the place its displayed in, but its mainly to protect the establishment itself. 🙂
The second part, another place your rule should apply is any major chain store that sells toys and games. However, there should be a take it home and try it policy. I don’t think that second part would work, but how often times have you tried a toy or board game only to find it, BORING. Now you’ve spent that money and are stuck with a drab game that you wouldn’t sell to your worst enemy on E-bay!
I’m glad a real artist responded! That’s really interesting about purposeful overinflation–I hadn’t thought of that.
For board games, I think I’d defer to my comment about movie tickets. I think some responsibility is on you, the consumer, to research the game in advance (I’d suggest boardgamegeek.com) to see if it’s fun. Toys are a little trickier. Could you give an example?
Hmmm. It’s kind of hard to explain but I’ll try my best. I’ll use the movie analogy. I can’t go to a movie based on what a critic site recommends. (I might consider a friends recommendation if we have similar tastes.) Often times, what other people find really great, for some reason I’m not entertained by it. (However, things I’m entertained by, they might not be as well.) Going on recommendations by people I don’t know, is very tricky, therefore I can’t rely on an unknown’s opinion to tell me what I should like.
Someone asked me when we were in lag time on a project, “Favorite movie of all time…GO!?” The knee jerk reaction was, “Dumb and Dumber!” See what I mean? Not everyone would agree on that and quite a few people would say it doesn’t even compare to movies like, “Casablanca” or “Schindler’s List”. Movies that other people would put up for Oscar I would shelve and gladly put a comedy up instead.
So as for the Toy thing, even though the site would be helpful, something tells me that my taste wouldn’t be everyone else’s taste. Therefore your pricing model would be perfect, for movies, for games and toys, AND art.
The pricing would even out because a game that I might think is worth 5 bucks, someone would think is worth its weight in gold. I can’t rely on someone else to tell me what my kind of fun should be? Some of the stupid dollar toys like frisbees which require someone else to enjoy it with are more fun than a robot that blows bubbles.
(Hopefully that made sense? If not I blame just having woken up and being groggy and opinionated at the same time.)
Okay, I see what you’re saying if you’re strictly following movie ratings, but I like to dig deeper into reviews by critics I trust, I can usually know almost for sure if I’m going to like the movie or not. For example, I just read a trusted reviewer’s take on Sex in the City 2, and there is absolutely no way I’d like that movie. Maybe I’d laugh a few times, maybe I’d see some breasts, but other than that, I know it’s not for me. But some people will watch it and think it’s the best movie ever made. And that’s okay–it’s just not their word that I’ll consider when making my decision about seeing it.
Well thats what I was kind of getting at with the reviews by a critic. My opinion on things is so varied that I can’t expect a critic to always consistently share the same taste as me.
As far as the Sex and the City review, I see what you’re getting at. Its kind of like me and the movie “The Expendables”. Even though I can appreciate those actors in other movies, this is definitely a movie I don’t want to see. Its every action movie ever made combined. 🙂
So how do you establish trust in a critic you don’t know? Do you monitor certain ones to see who is consistent with your taste?
I primarily read early movie reviews on a site called Ain’t It Cool News (aintitcool.com). I trust most of the reviewers there, especially having read their work for years. Sometimes they get really excited about a movie and review it too well (later they admit that), but we all do that sometimes. 🙂
Yes, this is true 😉
I agree that is a good way to sell art. The only piece of art I have ever purchased was bought in an auction type format so I bid what I wanted to pay and luckily won it
an undergraduate eduction–i mean, come on. ^^
Ha ha…you know, I bet that school’s post-graduation gifts would be way higher than any other school.