I'd love to hear more about your 'give-away-a-dollar-a-day' practice.

Thanks for reading,

Tara

Thank you for sharing your story with me. I am so pleased to hear of
another person (besides Radiohead) using this model. And even better,
finding positive results with it. I too have been practicing value
pricing for a month now and I am more than happy with the results. The
feeling of doing business with someone is completely changed. It has
truly become an exercise in the true value I can create for others,
rather than if my prices meet my perceived value.

I'd love to be updated on how your new album goes and if you use value
pricing again.

Thanks for reading.

I'm a musician and have been fascinated about this subject, even before Radiohead did their version of it. When I released an album at the end of 2007, I was going through a lot of the same thoughts as you mentioned in the post and decided to try one version of value pricing. In the release week, I offered to send a physical CD to everyone who gave me their street address and provided them with my bank details so that when they had listened to the album, they could pay whatever they felt the music was worth to them (including nothing). The worst case scenario was that I would send free CDs around the world and pay not only the manufacturing of the discs but also the mailing costs (and naturally the value of the creative work).

It was a pretty encouraging case study. Most of the people paid about the average of what a music CD costs at a record store, but a few also payed a lot more. Also there was not a single person that did not pay anything, so any fears of being used where really unnecessary.

I am spending a lot of time/money/energy on my next album/media project and am wondering if I will be able to try that same thing again. Judging from the results and feedback that I got it should be a no-brainer, but still the human mind is always producing some background doubts. I'm confident thought that I will implement some version of value pricing, that's for sure :)

Thank you so much for sharing your honest opinion about value pricing.
I think you have raised a key point to address with value pricing and
that is putting the customer at ease. The last thing that value
pricing is suppose to create is an environment of fear. If anything,
it is suppose to remove the fear and anxiety that surrounds money.

One thing I have thought about in regards to undervaluing someone is
this: if you approach a product or service with an interest in
purchasing it or using it, you have likely done so because you already
see the value in it and deem that you can afford it. In reality, you
have already placed a value on it without even knowing it. Your
decision to not buy the service or product likely will result from A.
the price exceeding the value you placed on it, B. the value being
less than you expected and are willing to pay for. Either way, the
true value you place on the product/service is what will determine
whether a purchase is made.

Perhaps what it really comes down to is trusting your instincts. Even
when it comes to money and pricing.

But that's just me. Your right client may not feel that way at all. I guess it all depends on who your clients are and how comfortable they would feel with that approach.

Great points. Here are my thoughts on them:

on too much demand – this assumes that I work with everyone who
approaches me, which I do not and will not. I almost look at it as a
great way to ensure you are working on the projects that I am truly
passionate about.
on Radiohead's findings – I appreciate the statistics though I am
always wary of them as you can manipulate them to tell whatever story
you want to tell. While you note that 38% were sold for less than the
“regular price”, the stat doesn't tell you how many of the 62% was
sold for more than “regular price” or if they found that they sold
more CD's, in general, using this price model. These two factors are
important when looking at the 38% stat.

I wrote a bit about the economics of my decision in the post, Get Paid
Your Value, Not Your Price – http://www.elasticmind.ca/innerpreneur/index.ph...

Thank you so much for sharing your thoughts. This will be an
interesting experiment, no doubt.

I've read that in 2007, the rock band Radiohead offered its album 'In Rainbows' as a download for a “pay as you want” price. Research concluded that an estimated 38% of those that downloaded the album paid an average of $6. That price is less than half what I pay for a physical CD at a local Target or Wal Mart.

I look forward to following your posts as your value pricing experiment unfolds.

Good luck to you,
Eric

I certainly am interested and I'd love to hear more about your
experiences with value pricing. I will email you. Thanks!