candid 40 minute video interview on alternative pricing models – pwyc, barter, sliding scale and gift economy

I’m excited to send you this email because it includes a forty minute interview with me talking about my view on alternative pricing models such as pay what you can/want, barter, sliding scale or straight up ‘gift economy’ and more.

If you’ve ever wanted to experiment with your pricing then you might really like this. 

I’ve written a few blog posts about it but this is the most in depth you’ve likely ever heard me speak about it.

And let me be clear – I am speaking from considerable personal experience on the subject having run the vast majority of my weekend workshops over the past decade on a pay what you can model. I’ve led a weekend workshop on the topic and it’s been one of the main topics of discussion I’ve had with my colleagues over the past years.

What you’re about to watch is the condensed, Coles Notes version of the past ten years of my hard won learnings on the topic.

This video is my gift to you. Feel free to share it.

I hope you enjoy it.

Amanda Palmer: The Art of Asking

amanda palmer future of music Amanda Palmer: The Art of AskingThis video of Amanda Palmer’s TED Talk reminds me so much of my pay what you can philosophy and rings true in my experiences of trusting people. Beautiful.

designing for generosity

Screen Shot 2012 05 06 at 11.25.20 AM designing for generosityA dear colleague of mine – Nippun Mehta – did a TEDx talk on the theme of “Designing for Generosity“. That I had to share with you.

Capitalism seems to be based on the idea that we’re selfish.

And there’s truth to this.

We do everything we do to meet our needs. But it’s so easy to forget that some of our deepest needs are for connection, community and contribution. So, what if we designed things with that in mind? What if our businesses gave people not only ways to consume more but also created spaces to contribute and connect?

Simon Sinek speaks to this so brilliantly in his book Start With Why – that marketing tricks and tactics might create sales – but they won’t create loyalty.

What creates loyalty? It’s less about what we do and how we do it and more about ‘why’ we do it. People come together around a shared ‘why’. This is what brings communities and teams most deeply together – sharing a deeper and more transcendent purpose.

As we weave this into our business – and give our communities ways to contribute we then also deepen our connection to them.

Nippun gives some wonderful examples of pay what you can pricing models in business. What most people never consider with PWYC pricing models is the word of mouth potential of them – how people will not only talk about what you do – but how you charge for it.

If you’re committed to staying true to your politics, remaining accessible to the people who need you most but also to sustaining yourself – I think you’ll really love this video.

Here’s a blurb from the Karmatube description:

What would the world look like if we designed for generosity? Instead of assuming that people want to simply maximize self-interest, what if our institutions and organizations catered to our deeper motivations? This compelling TEDx talk explores this question and introduces the concept of Giftivism: the practice of radically generous acts that change the world. The video is charged with stories of such acts, ranging from: the largest peaceful transfer of land in human history, to a pay-it-forward restaurant, to a 10-year-old’s unconventional birthday celebration, and the stunning interaction between a victim and his teenage mugger. With clarity and insight, it details the common threads that run through all these gift manifestations, and invites us to participate through everyday acts of kindness — in an uplifting global movement.

You can watch it below.

 

Screen Shot 2012 05 06 at 11.23.50 AM designing for generosity

pay what you can, gift economy, sliding scale and barter

hat with money 300x226 pay what you can, gift economy, sliding scale and barterMy colleague Aumatma has run a ‘gift economy’ style naturopathic clinic for two and a half years. For years, I’ve run most of my workshops on a pay what you can basis.

After all, imagine having your clients not only rave about what you do but also how you charge for it.

What if you never had to feel even a little bit uncomfortable about your pricing ever again?

What if you could balance your desire to stay accessible (helping those who need you most), stay true to your politics and your need to be financially sustainable (making sure your needs are met to).

We’d love to get your help with two things . . .

THING #1 - Examples of businesses and projects that work on a pay what you can, gift economy, sliding scale and barter basis (in part or entirely). If you’ve tried to work with these models, what have you found? What have you learned?

THING #2 - What are your biggest questions or wonderings around these kinds of alternative pricing models?

pay what you can and cheesecake

rebecca tracey pay what you can and cheesecakeSo . . . I just got featured on a blog by one of my favourite people in Canada – Rebecca Tracey (pictured here).  I thought you might enjoy reading it.

It’s about cheesecake and the benefits of the Pay What You Can economy. For some people, offering services and events on a PWYC basis can be the very best thing ever. Maybe for you too?

If you’re always intrigued to hear another lense on what to charge, you can read her post here and check out her own PWYC offer too.

 

If you’d like get cool posts like this in your inbox every few days CLICK HERE to subscribe to my blog and you’ll also get a free copy of my fancy new ebook “Marketing for Hippies” when it’s done.

oakland’s pay what you want holistic clinic

aumatma 262x300 oaklands pay what you want holistic clinicImagine a holistic health clinic where you didn’t have to pay.

Last August, I was emailed a link to a video about just such a clinic in Oakland, California. Since people know I do most of my workshops on a Pay What You Can basis – they tend to send me lots of stories and examples. I watched the video and was so moved and posted it onto my blog.

And then, just a month ago I was in Oakland leading a marketing workshop with my pal Alex Baisley called, ‘Marketing for Hippies and Gyspies’ (myself being the hippie and alex being the gyspie). As we did the introduction circle at the start of the day – a woman, Aumatma Binal Shah (pictured right), introduced herself and the amazing, gift economy holistic health clinic she ran.

Levers and gears clicked in my head. I burst out in the biggest smile and blurted out, ‘You’re on my blog!!!’. I was so excited. I think you will be too when you read about it and watch the video below.

Aumatma’s project – The Karma Clinic – is special, brave and generous. I want to see it get every scrap of support it can. Spread the word.

Below is my interview with her.

*

What is the name of your project?

Karma Clinic

What’s the story of how this came about? What was the need you saw in the community that it emerged from?

I had a vision when I was 18 that I would be doctor running a ‘free’ clinic.

At the time, I wanted nothing to do with either- medicine or free! Fast forward 4 years of pre-med undergrad and at the end not having a clue what to do with my life since I really did not want to go to medical school, I was discouraged and confused.

At that time, I got a piece of “junk mail” at my parents’ home from a Naturopathic College. I took one look at the curriculum and knew that I was meant to become a Naturopathic Doctor and that I was being called to be of service. Through school, I volunteered at numerous free clinics and noticed that something was missing- people mostly took us for granted, and did not follow the suggestions/ recommendations given to them.

After graduation from Naturopathic school with a Doctorate in Naturopathy and Master’s in Nutrition, I felt the need for an inward journey for discovery and deepening of understanding the world from a wholistic perspective.

That desire led me to a monastery where I spent a year, living mostly in silence, without any contact with money, and lots of time to connect with myself and nature while living harmoniously & sustainably with community and the earth. After a year, I felt called to re-start my service to the world on a broader scale so I left the monastery to join a naturopathic office, with my mentor.

Within a few months, I started to notice a repeated uneasiness in the pit of my stomach after each session, upon walking out of the office and telling the client they now owed us a large sum of money (usually between $300-500). I did not like the equation of this connection and relationship with another person with cash or transaction.

In complete synchro-destiny, I received an email from a dear friend who runs an organization/ hub for gift-economy projects, saying that there was some talk of a ‘karma hospital’- similar to Karma Kitchen, but instead of serving food, the intention was to serve health. Very excited by the possibility, I moved across the country 3 months later, to converse and create with others that were inspired by the same vision.

This closed a loop for me of the vision I had in meditation 10 years prior, and I knew that I was following my path, my truth.

Can you share a few examples of how your project works?

The way it works is: a client contacts me (or some other practitioner within the network) for an appointment. They get sent an extensive questionnaire which they fill out and send back. Then, they make an appointment to come into the office. We have our first session, generally about 2 hours.

At the end of our time together, I say something like (it changes to what’s most authentic in the moment): “Thank you for this opportunity to be of service, and a small conduit for your healing process. I offer this to you as a gift, because there’s no price tag that is enough- and any price is too much! Your session was made possible by someone that came before you and if you wish to pay it forward, so that someone else may have this experience, you can do so- now or at any point in the future.” At that point, the client may have questions, or an offering, or a ‘thank you’ and a hug! All are received with trust and generous heart.

Who do you find it’s working best for?

In terms of the gift-economy component, it works best for those that are wishing to grow in their generosity, don’t have access to medical care and are in need of it, and are willing to make a shift in their life for the better.

In terms of my own specialties, I work with a variety of issues but focus on: anxiety, depression, sleep problems, and stress-induced chronic illness. The reason that I focus on these is that they often get ignored and eventually result in greater imbalances and diseases in the body. So, its the way I feel I can be of the most service to those that need it the most!

how do you deal with the ‘guilt’ that can come up when people are afraid they won’t pay enough – i get this all the time.

The ‘guilt’ is a feeling that’s an internal measure that can actually be used as an indicator light for internal truth, rather than intellectualized truth. However, that feeling of guilt is internal- understanding that it is not coming from the gift-economy practitioner because there’s no pressure to give back in the gift-economy. The “right” amount should feel light and joyous. So, when giving a gift, one should give the amount that feels good- its a different place for everyone, but each individual has that place that feels “light and right” to them! It’s not too much, not too little.

 

What are the top three most effective ways you’ve found to market this?

I haven’t marketed at all! My clients spread the word all on their own. So, the best thing I have found to do is to be present with the person immediately in front of me.

do you have any fancy marketing and promotion ideas coming up?

No. Just moving with the flow of what the universe brings in.

what advice would you give to someone wanting to try a gift economy approach?
Put on your gear (of compassion and trust) and dive in! It does help to have a mentor though- because inevitably, things arise which need to be talked through.  In the beginning, it’s also helpful to have some period of time that your basic needs are met to start out (I say 6 months is a good period of time), to allow yourself to really dive into the gift-economy, without expecting anything in return. Last but not least, connect with community that inspires you and connect with your own gratitude regularly.

What are the three biggest lessons you’ve learned along the way?

TRUST. TRUST. TRUST. I have deepened (and continue to deepen) my trust in the universe- that all my needs will be met if I just allow my gifts to flow through me.

What’s the next level for your project? What are you most excited about that’s coming up?

Excited about the growing network of gift-based healers across the country! I am going to be on tour June 5th-July 15th, doing funshops on “Money & Media for healers”. These workshops are also offered on a gift basis and am looking forward to having conversations with other healers around money, sharing gift-economy model for healthcare with them, and inspiring them to try new ways of practicing their art/ service/ gift.

Go watch this little video about the Karma Clinic:

 

 

If people want to find out more about your project, support it or get involved – what should they do?

Come visit our site at:

http://www.karmaclinic.org

 

If you’d like get cool posts like this in your inbox every few days CLICK HERE to subscribe to my blog and you’ll also get a free copy of my fancy new ebook “Marketing for Hippies” when it’s done.


Pay What You Can Nutritional Consulting

11rebeccatracey Pay What You Can Nutritional ConsultingA new Toronto friend of mine, Rebecca Tracey (pictured to the right), is starting her business as an holistic nutritionist. And she sent me a text the other night asking my opinion about doing pay what you can sessions. And since this is an idea a lot of people seem to be having – I thought I’d share it with you all. Here’s the transcript of our conversation . . .

Conversation #1: Via iPhone texting

Rebecca: Hi! I want to do nutrition consults on pay what you can basis for the next few weeks while my ankle is busted (I can’t work at the restaurant)… ideas on how to  go about this?

Me: Yes. I’ve got a few ideas. Number 1 – give them mandatory homework to complete before the call.  If they dont do it in full – you reschedule the consult.

Rebecca: It won’t be a call…. Will be in person… I need them to fill out a 5 day food journal though before we meet…

Me: Cool. Make that mandatory.  Have them send it to you 24 hours before you meet.

Rebecca: Hmmm interesting! Doesn’t that make them feel like you are being… For lack of a better word… Bossy? Hard? Like a parent?

Me: Self respect. Boundaries.  That’s how it will strike people.  Very attractive. Also. How much would this cost if they were to pay full price?

Rebecca: About 90-125 for an hour… If I was charging what most nutritionists charge.

Me: Great. So make sure you tell them the price.  Like, “this is how much this would normally cost”

Rebecca: Right.

Me: I want to offer you a session that you’d normally pay $90 for. But you can have it for whatever you want to pay. However: there are three charming catches.

Catch #1: you must keep a five day food journal and send me the results 24 hours before our meeting.

Catch #2: you must be willing to give me honest written feedback (good or bad) within 48 hours of the consult. I want to learn!

Catch #3: you must meet me at X location. I have no car and can’t travel far.”

Does that all make sense?

Rebecca: That all sounds like what I would likely tell them anyway…. Except for the feedback thing.. I ask for it but not demand it. So. Doesnt all this make them think they are doing you a favor an therefore not pay you very much money? And how do you suggest having people pay at the end of the consult? Give it to me directly? Put in Closed envelope?

Me: I suggest inviting them to mail you a cheque 3 days after. Give them a stamped envelope with your address already on it. . They’ll pay.  :)

Rebecca: Thank you!!! That all makes sense and I feel totally comfortable doing it that way.

Conversation #2: on facebook chat

Rebecca: hello! thank you so much for the PWYC tips! love it!

Me: :-):-) glad it helped.

Rebecca: it did! so you think 3 days after works for nutrition? one service i am offering is a more in depth protocol, which woudl require a follow up appt 2 weeks after the initial…

Me: have you considered making it sliding scale vs. pwyc? giving them a range?

Rebecca: hmmm havent decided which is better.

Me: you could even do ‘sliding scale of $1 – 90′ or, $40 – 90 – the key is to pick a price or range that feels really great for you. and for sure i’d make it a limited offer like, ‘i’m sitting here witha bum ankle and i’ve got time and space for 10 people. so i wanted to make it totally easy to say yes to – a no brainer’ that kind of thing.’

Rebecca: yep for sure. hmmm re: sliding scale… not sure… still seems like i am telling them the price…and i dont want to exclude anyone who cant pay the minimum… but then again, i dont want to be doing this for $5 a piece either! :):)

Me: i’ve had people pay me 10 days after a pwyc consult. my logic was – i want you to see if you get results and then pay me based on that and you might say ‘it’s a $40 – 90 but i also accept barter’ or ‘it’s $90. period. but if you can’t afford to pay cash – we can come up with a creative barter’ or ‘it’s $90 but i’ll let you pay that out in three installments so it’s totally painless – and you bring post dated cheques’

Rebecca: yeah im not interesting in bartering right now.. i have done some of that in the past and it gets complicated

Me: i would NOT do it for $5. don’t let it happen

Rebecca: what if someone pays me $5!?

Me: it’s why i’m wondering ifsliding scale with a minimum would work better.

Rebecca: also, with nutrition, i would love to be able to let people implement changes, see results, and then pay me based on what they think its worth… but compliance is such an issue that i wouldn’t want to bank on it

Me: totally. it’s why the homework upfront is so key. it gets them to start investing. and weeds out the tirekickers. if someone won’t do 5 days of homework they won’t implement your suggestions.

Rebecca: so smart! i wonder what else i could get them to do…. i need the food journal anyway, but i bet there is something else i can do that would improve compliance later on too… ohhh! what about something like ..

Me: totally. that’s exactly the thinking to have: how can you get them to vest themselves more deeply in it. you might ask them to get a ‘food buddy’ – like find someone they’ll be doing this process with

Rebecca: ha i was just about to say that

Me: nice! and before they meet you for the session they need to have set up a follow up meeting with their buddy.

Rebecca: that would be a huge help. like telling 3 close friends/family members what they are doing and having them get on board and keep them accountable

Me: totally. i’d give them a prewritten email they can send to friends and family. they can edit it obviously, but something like, ‘hey friends! i’m excited – meeting with a nutritionist soon and excited to implement what she suggests to make my diet a bit healthier and i want to ask for your support in the following three ways . . .”

Rebecca: yes, that is wonderful! oh you are so smart

Me: it’s why i get paid . . . whatever . . . people want to pay me . . .?

Rebecca: haha

If you’re in Toronto and want to book a session with her just go to her website – www.rebeccatracey.ca where you’ll find her contact info. And to see how she wrote up her PWYC offer (with my commentary) go HERE.

 

If you’d like get cool posts like this in your inbox every few days CLICK HERE to subscribe to my blog and you’ll also get a free copy of my fancy new ebook “Marketing for Hippies” when it’s done.

 

When Your Customers Set the Price – Chris Guillebeau

Pasted Image 2 300x202 When Your Customers Set the Price   Chris GuillebeauHere’s a piece from Business Week written by Chris Guillebeau, Blogger and owner UnconventionalGuides.com in Seattle.

On the morning of her 41st birthday, author Danielle LaPorte posted a promotion on her blog and then went to the spa in her home city of Vancouver, B.C. She had prepared something special for her readers that day—a “Pay-what-you-will” offer for her Firestarter Sessions help package, a digital strategy session for entrepreneurs, which normally retails at $150. How would it go over? She hoped it would do well, of course, but it was an unusual experiment.

An hour later, Danielle couldn’t resist the urge to see what was happening. Leaving her spa appointment, she flipped open her iPhone—and flipped out. From all over the world, offers to purchase her Firestarter were streaming in by the hundreds.

Danielle is a smart marketer (“I came out of the womb with a press release,” she likes to say), but she didn’t expect the response to be as great as it was. How great? Based on previous offers and a moderate but growing readership, she expected about 70 offers. Instead, over the course of 24 hours, Danielle received more than 700 offers, for a total of $30,000 in new income.

How did this experiment work so well? What went on behind the scenes to create such a big success?

Offers were made through public comments. Danielle encouraged her readers to post comments on the site containing their offer. Anonymity was available for those who wanted it, but 500-plus comments proved that most people were comfortable going live. The comments also provided social proof (“everyone’s doing it”) and public validity.

All offers accepted … almost. The smart marketer in Danielle didn’t tell people what amount to offer, but she did make clear that she wasn’t giving the goods away for free. “One person offered to pay $10 on their Visa card,” she said. “I told them, ‘Thanks but no thanks.’” By making a clear value proposition in the blog post, she set expectations for high offers without disqualifying most lower ones.

Community reigns supreme. Several of Danielle’s first readers proposed creative offers, which in turn encouraged other creative offers. Someone kicked off a trend of donating on behalf of others; someone offered $40 and a shipment of vegan baked goods; someone offered one amount to Danielle along with another contribution to Gulf cleanup efforts. The variety made it fun and interesting.

Danielle’s pay-what-you-will experiment was a big hit based on a risky principle: Throw out a creative idea, and let your customers loose. By embracing risk—while carefully defining a few parameters—she earned a nice payday while also strengthening the bond with her readers. If you’re willing to follow Danielle’s lead and take a creative risk in your business, watch out. You’ll definitely send a signal that business-as-usual is changing, and you might even end up starting a fire of new sales.

For more tips like this you can check out:

http://www.businessweek.com/smallbiz/tips/

 

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Samarya Center: Unfold

An amazing community centered yoga center in Seattle that decided to buck the system and do it all differently.

 

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The Biggest Mistake You Can Do With Pay What You Can Workshops

The following is an excerpt taken from an interview I did with the brilliant Robert Middleton. A lot of my core marketing philosophy, I got from this man. This material will be compiled into a book called “Pay What You Want” in 2011.

Robert: What are some of the mistakes that you might make with Pay What You Can? What have you seen?

Tad: The biggest one I call the “Put the Money in the Basket.” People will do an event or concert or whatever it is. Then they say, “Everybody, thanks for coming. Thanks so much. There’s a basket at the back of the room. Put some money in it if you want to put some money in. You don’t have to. There’s no pressure. Please, don’t bother. You’re probably broke. Don’t put any money in. It’s cool. In fact, if there’s money in the basket and you need some, just take some out. In fact, I have $5 here. Who wants some money?

There’s this crazy awkwardness about it, and it’s very disorganized. There’s so many challenges with that. One of the biggest ones is you’ll have people who want to give you money who will just forget.

They genuinely are like, “I’m going to give $20.” They’ll have it in their hand and walk by. They just get caught up in a conversation. They’ll feel bad about it later. So there’s that.

Robert: So don’t do that.

Pasted Image 43 The Biggest Mistake You Can Do With Pay What You Can WorkshopsTad: Don’t do that. The other mistake I’ve seen, there’s so many, one is this. It’s funny. I was talking with a street performer, Nick Nickolas, who’s this brilliant guy from Australia, and I asked him. You know street performers will do their whole show. They’ll do their pitch at the end. I noticed how different street performers had a different pitch at the end. You know how they phrase it differently. His pitch was really short. A lot of performers would be really long.

I asked him, “Nick, what do you say is the biggest mistake street performers make when they do their pitch? “He said, “They save too much of it for the end. They do this whole show and then there is this whole thing. If you watch my show, you’ll notice that I’m sort of doing the pitch throughout the show.”

So he’ll do a trick, and he’ll be like, “An old lady saw me do that trick, and came up to me and said, ‘I like that. That show was really good. That show was worth $5.’” Then he looks at the audience, “I just thought I’d point that out.

He may make a reference, “If you’d seen me do this at a pub, you’d buy me a beer and a beer is $5. I just thought I point that out.” He’s naming it.

Robert: He’s priming the audience for them to expect that he’s going to ask for some money, but it’s going to be reasonable.

Tad: Yeah and he’s also saying, “Here’s what I think it’s worth. Here’s what you’d pay anywhere else.” He gives a number of examples throughout the show.

When I do a weekend workshop, it’s not like, “Hey, it’s a Pay What You Can workshop,” and then at the very end, “By the way, you’d pay $2,000 anywhere else.” That would be a real shock for people.

In the sales letter and in the flow of the weekend, I’m making reference to it. I’m saying, “I was at this Jay Abraham marketing workshop. It was $5,000 for five days, and he had 600 people there.” I’m using it to illustrate the principle of risk reversal, but I’m naming that so there’s some understanding as we go through.

I think another mistake people make is pretty rare, but I’ve still seen it. People say it’s basically a free event, and then they pass the hat at the end. That’s terrible. Or they charge something at the door and then do a pass-the-hat as well. That’s a terrible mistake.

Also a mistake is giving no context for what it’s worth and then being shocked at how little they receive at the end. It’s like I do a whole weekend, but if they have no idea what to pay, they will generally pay like $20 or $50. There’s got to be a context.

And not developing their back end. Pay what you can is great, especially as a lead generator, but like you’re saying, they may go through the weekend and then decide to work with you one on one or sign up for an advanced thing. It’s really important to think about what’s going to happen after.

Robert: In marketing we call that the back end. The front end is the initial sell. The back end is long-term sales and business that you generate.

Tad: I think it really is a mistake to think about doing everything as a Pay What You Can. It just isn’t going to be appropriate in every situation.

I think a mistake, too, is giving up after one event because it didn’t make the money they thought they deserved, versus getting really curious. “How can I tweak this to make this even better and make it more valuable?

I think actually one of the bigger mistakes is when people who are using Pay What You Can treat it too casually. It’s sort of like, “Pay whatever you want,” versus really, especially in a workshop setting, creating the space to talk about it. I take about half an hour at the end of my workshop to talk about money and to talk about the payment for the workshop.

 

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