Consumers Will Pay More To Feel Good About Themselves
(Image credit: Getty Images via @daylife)
Have you ever considered pay-what-you-want (PWYW) pricing for your brand? What may seem like a solid go-out-of-business model could be a secret weapon for brands connected to a cause. Why? People like feeling good about themselves, and PWYW pricing, especially when it benefits someone else, helps them do just that.
Take this recent study covered in ScienceNOW in which scientists tested PWYW pricing in two settings with a cause component:
Setting I – You know those photos you can buy at amusement parks of yourself looking terrified on the roller coaster you just rode? How much would you pay for one of those photos? How much would you pay if you knew that half of your money would go to a good cause?
Researchers found that attendees at an amusement park paid five times more for a photo of themselves on a ride under PWYW pricing if told that half the proceeds would go to charity.
Setting II – Guests at a restaurant with PWYW pricing were given a choice: either pay someone directly for your meal or pay anonymously on your way out by slipping money into a box near the door.
Customers paid about 13 percent more when they paid anonymously than when they paid someone directly. It’s not five times more, but 13 percent isn’t bad.
For CPG brands, this could be a great model to take to the food service channel where flexible pricing is more controllable, especially at regional or independent operators. I wonder if the good feeling consumers get from their charitable donation could cancel out the guilt they may feel about purchasing indulgent products–they may not feel so bad about getting that full-fat desserts or appetizers or a specialty drink if they feel good about giving to charity with that purchase, for example.
They may also feel extra-good about their smarter purchases if they donate to charity on top of that, as in, they may go for a green product and feel better about supporting the environment and a cause dear to their heart. With it being so difficult to get branded placement in food service, this could also be an avenue to getting branded exposure.