Sharing the Responsibility of Not Setting Prices
Recently, there was an interesting experiment conducted in not setting prices and charitable giving, by UC San Diego Rady School of Management and Disney Research. Conducting their experiment at a popular roller coaster, using post-roller coaster action photos as the item to be valued, they found not setting prices to be a viable pricing strategy and social responsibility strategy for companies–when the customer’s willingness to give is stimulated.
While the study focuses on stimulating generosity in a charitable setting, the study’s findings can be applied to any relationship and experience-based business. The researchers found when a customer feels more connected to what they are giving to—and in choice about what/how much they are giving—the more willing they are to give. When buyers know their money and generosity will benefit something specific, such as a charity, or someone specific, such as the business owner, they feel a more tangible and human connection to the value their giving is creating, and in turn, the more open they are to giving—and giving generously.
The study concluded not setting prices could be a tool for creating opportunities for “shared social responsibility” and this shared responsibility may provide the critical sustainability component that is often lacking in current social responsibility strategies. Fascinating.
photographed in my hometown of Toronto by Toban B.