What do the following businesses have in common? Annalakshmi. Radiohead. Dasparkhotel.
They are all marketing goods and services using a new and radical business model: Pay What You Want.
Annalakshmi is a restaurant in Perth, Australia that puts the sale in the hands of the diner. Their motto is “Eat as you like, pay as you feel”.
Radiohead is a music group, whose album In Rainbows was marketed in the same way– pay what you like for the download*.
Dasparkhotel is an unusual hotel built from sewer tubes. Popular with hostel type travelers, they charge on a pay-as-you-wish basis.
I am curious to know the ROI on this model. I suspect with music downloads it is close to zero but I don’t imagine many people eat a meal or use the sleeping accommodations without paying something.
Now, imagine real estate brokers charging this way? Radical? Maybe. Would it work? Hmm… Is anyone trying it? (Maybe you’ll be the first and we’ll see you on the Evening News.)
*In Rainbows is no longer available as a download.
Technorati Tags: marketing, pay what you want, real estate marketing
For any marketing, some one has to be act as a mediator. Hence growth will improve for both professionals.
So is Sellsuis going to be a pay as you want listing service?
Hmm.. that’s something to think about, Derek.
In many ways, real estate agents are already working for FREE! Take a listing, and if it doesn’t sell, you just worked for free. Work with buyers, drive them around, and if they buy at an open house, or decide to not buy at all, you just worked for free.
I guess if we worked with a contract that just says “Pay me what you think I was worth in the end….” that would be a closer model.
I don’t expect that idea to go mainstream with agents!
The new Nine Inch Nails album, Ghosts I-IV is going down a similar line as Radiohead’s In Rainbows by free BitTorrent downloads under Creative Commons licenses
http://www.news.com/8301-10784_3-9853174-7.html
Pay As You Want as an economic model works best in industries where the marginal costs are low. If I can sell 10 Million MP3s for fractions of a cent, then it makes a lot of sense for me to let people buy them for whatever they are willing to give me.
For retail, it becomes a little stickier. You need to come up with a way to make it so that on average you are making back at least as much as you paid to produce.
Good point Steve. Maybe you could rework the Dollar Store model to a pay what you want model. I think housing could work under the right circumstances to fill empty rooms– maybe pay what you want after midnight (with the same checkout time) since these rooms would likely remain empty. The standby airfare is based along the lines of the after midnight hotel room, where the seat would go empty otherwise.
The model might thus find application on a “circumstance” basis.
This type of marketing is very interesting, almost like charity… This will never work for real estate agents! There are way to many sharks and scams out there… If a Realtor offered me that type of solution I would be thinking “whats the catch” hehe. Anyways, this was entertaining.
Anthony B.