Guest Post: Why You Should NOT Work In The Gift Economy

 

by Mirror Living

January 2015

 

Occasionally on this wild path of working in the gift economy, I’ve been approached almost with a sense of reverence. Some souls are deeply touched, moved to tears by me doing this so publicly. It confirms their own insights into alternative pricing models, the ruin that is our current economic system and the myth of money and debt. It gives a sense of possibility for those of us who’ve felt like outsiders, freaks and rejects of society our entire lives. It echoes the journey of the heart’s deepest wisdom and the more beautiful world we can create together.

Many are certain mainstream pricing and business models are not for them. Or they’ve tried it for short periods of time and it’s been a difficult and overwhelming road leading to retreat or blame of the system or themselves. A sense of powerlessness and inadequacy is evident. When someone comes to me for help and they tell me they work in the gift, my heart sinks a little for I cannot recommend running a business this way initially. I don’t teach people to work in the gift because I don’t yet know it’s possible. For me the ride thus far has been crazy-making, humbling and incredibly challenging (just like working in the mainstream economy is) with the very idea of alternative economies still being confronting to the majority. There’s a familiar, comfortable weight of security in the way things have always been done. There are mammoth amounts of fear and complacency that first need to be met within the self and then met with love in others before we can embrace what it means to truly work in the spirit of the gift.

There’s also an assumption (the illusion of good marketing if you will), that because I’m doing this visibly and I’m seen regularly in both pixels and real world events and because I present myself in a professional manner, I must be successful working in the gift. And if I’m successful, then you will be too. (I’m doing OK but definitely not making as much money as I was in regular ol’ business. Also, for the first time since I left home at age 17, my partner is paying my rent so I no longer have the responsibility of having to earning enough to keep a roof over our heads. I am also debt-free.)

I define the gift economy simply – a model of the movement within society of necessary goods and services wherein human relationships are valued above all else, one in which money no longer determines the existence of relationship. Money may still be used as part of the gift economy but it’s presence (or absence) does not define the relationship (unlike in the dominant economy). It’s a movement from accumulation and separation toward generosity and the natural reciprocity that arises in the face of a gift freely given. Models like pay what you want / pay what it’s worth pricing, you decide invoicing and by donation are all interpretations of the gift economy and attempt to capture the essence of the pure gift economy found in traditional cultures. For me, the gift economy does not include barter and trade models that seek agreement on value before the transaction can occur.

Before transitioning into the gift economy 6 months ago, income earned via business in the current economic model paid my way 100% for more than 4 years. Without looking at the nitty gritty of exactly what the number of zeros I made annually add up to, from a survival perspective I was running a “successful” business. This journey has been (and continues to be) one of the most intense and liberating spiritual paths I could possibly imagine. It’s not for the faint-hearted or for those who want quick and easy money. There have been years of hard work, long hours, multiple failures and disappointments, challenges, depressions and crippling self-doubt. Money issues shoved in my face. Putting things out there and getting no results, not being noticed, not being seen, not being responded to. Measuring achievements against others and believing with every cell in my body that of course, it’s obvious, I’m just not good enough and never will be. Drowning in unworthiness. Attempting to change who I am (yup, even going so far as to wear makeup and collared shirts. blech!) to better fit in. I’ve tried to sell, played the game, manipulated, become obsessed with money and woken in sweaty panics at 3.00 am. I’ve felt desperate, alone and ashamed of how little I have to show for the time, effort and energy I’ve put in. I’ve been scarred and have let fear dictate action (all this despite being a devoted yogini and dedicated-to-consciousness-and-higher-states love bunny). I’ve been human.

Alongside this, there’s been unspeakable thrills of putting out offers and overnight making rent for the next month. Sold out courses. Coaching sessions booked for weeks in advance. Beautiful feedback on blog posts and emails. Co-creative opportunities flowing in. Published print and online articles. Being sought out from word of mouth glowing referrals. The sense of one’s power that comes from taking action, showing up every day and seeing direct correlations between said actions and results. Knowing you’re the master of your own destiny. Moments of Awe. Radiant insights beyond this realm. I’ve cried many a tear of gratitude and received many an unsolicited testimonial of soppy thanks. I’ve seen and known the omnipotence of Source in my business and life. Witnessed miracles, coincidences, gifts of such incredible abundance I’m humbled and brought to my knees by the beauty and glory of it all. I’ve tasted heaven and know it is within. I’ve been spirit.

This has only been possible because of a willingness to step into the world as it is, not how I would like it to be. To look at business from every perspective, honour and identify what I don’t like about the mainstream economy and how most run their businesses and make choices that come from an empowered and embodied place that’s here, now and grounded in the third dimension.

The three reasons below outline why you should NOT work in the gift economy. The opinions contained here are strong (partly because I wish someone had been as straight with me when I first started working in the gift instead of having to messily hash it out on my own! But then again, maybe they did but I just couldn’t hear them…?). The pointers below are written specially for those new to business and for those who want to make enough money doing what they love in the world. 

1. Working in the gift economy can reinforce and perpetuate separation, creating an Us vs Them mentality

Many of us carry core wounding from lifetimes of feeling like an alien, of looking at the world around us and seeing nothing but deceit, unconsciousness and violence against each other and the earth. Many of us have exited in a variety of ways: into drugs, eastern spiritual, metaphysical and artistic paths and communal living with greater and lesser degrees of peace and lasting happiness. If less than lasting happiness has been your experience, I urge you to sit with and hold any part that wants to escape from this economy, judge or pull down society gently. Society and the economy is messed up, it’s true. But it’s no more messed up than our own internal processes. Pushing against it, avoiding it, shaming or blaming it is not an effective strategy for transformation or success in business in any kind of economy. It creates separation. 

And if our beautiful, profound and magnificent education is preventing us from engaging in the world as it is, we are contributing to separation on this planet. 

This may sound harsh but I’ve seen this truth repeatedly. I’ve also tried separation as a path more than almost any one else I know. It’s painful and it doesn’t work. Because we have to keep coming back into society as it is now. We have to engage in the economy. We have to invest in certain things to live in even rudimentary levels of comfort. We have to make decisions for sustainability that are more about the lesser of two evils than about real solutions. We have to interact with family and people who live here, in society. 

We can no longer avoid a world that doesn’t appear to value love and vulnerability. We can no longer afford to keep ourselves apart from others because of superior concepts of consciousness, inclusive economies and dedication to saving the planet. We can no longer judge others for their apparent lack of understanding of a view so radical and confronting to the norm they can’t even see it. Until we know every person who surrounds us is us, despite their convictions and choices demonstrating degrees of light / dark, willingness and ignorance we will not have a business from the heart (regardless of how pure our motives are of working in the gift and alternative economies). Instead, we are moving from fear, reaction and separation. I’m pretty sure this is not the kind of world we dream of.

2. You won’t learn the language of the world (and the world is where the money is)

One thing I know for sure is that if you step onto this path of the gift economy you will be judged as naive, potentially loopy, silly, and a crackpot hippie by many. Folks may be polite and supportive to your face but some part of them will be doubting you and your motivations, wondering what the catch is. Or people will be confused and won’t book in or buy because of this. Probably not your friends, for they love and understand you but in the wider community you will be likely be disregarded as someone who is too radical and far out to be serious about much of anything. This is reality (however narrow and sad it may be). This is how we live in the west. Our primary way of defining and determining interactions (outside of family and friends) is fiscal. Money determines the value, worth, breadth and depth of relationships and if you challenge this overtly you will be labelled, discounted and discarded. Your audience will be limited or worse, may become so far left-of-centre as to appear non-existent (I saw this clearly in a recent exploration “Working In the Gift Economy 7: The Experiment May Be Over). 

This is not how to make enough money doing what you love in the world :-(

I know many gifted individuals sharing their offerings in low-key, off-the-grid kind of ways working in alternative and gift economies. Some are amazing examples of how these models work effectively (in small, highly local, cloistered permaculture communities). Others are struggling with ideals they haven’t yet been able to actualise (without withdrawing from society and heading to the hills) or dealing with depressing internal conflicts around self-worth and integrity in making money, enoughness and survival. Many I know working in alternative economies have very low confidence in who they are (see core wounding above). They don’t know their message or what they stand for. They’re unable to talk clearly about what they do or invite people to experience it or communicate the value of their offerings. They cannot share from a pristine place of exactly what their service will help with, exactly who it’s for and exactly how much it costs. They haven’t learned how and because of this, are unable to attract clients and create enough income. They may then become disillusioned and leave before the energy of business can transform. Or shelve dreams entirely, holding onto stories of inadequacy for years ahead, go get jobs or opt-out of society to live in ashrams because it’s easier than running a business and facing fear and money every day. It’s easier to avoid learning a new language than to be yourself in the world as it is.

Before I started in business and had to learn the language of the world, I was steeped in separation (I didn’t know it at the time. I thought my heart was so wide open in divine angelic love, rainbows would pave every step of my way!). Learning this language, at even a basic level, has shown me a true connection that cannot be threatened by environment and noise. It’s taught me compassion for others and the world of mind, thought, judgement and comparison within my self. 

If you step into the gift economy without first having met and mastered communication, your experience and ability to serve others will be less. It’s likely you’ll tire rapidly of the hard work required to explain what you do because it’s not in terms people can easily understand. You may give up, believing you’ve failed and this is the real tragedy. There are way, WAY too many soft, caring, intelligent, talented, extraordinary people of the heart NOT doing what they love, NOT being seen because they haven’t yet found a creative and conscious way of being in business and marketing or they’ve given up looking. Their messages of self-healing and self-responsibility are not being heard or contributing to the wellbeing of the earth because of illiteracy.

3. A vital part of your own self-development and personal evolution will be neglected 

Our souls of course, are perfect, innocent and complete and need nothing to be done ever but if you’re feeling a call to share your voice, save the planet and make a difference, THIS is the next stage of evolution being asked. It’s not about changing who you are at your core or “playing the game”. It’s not about forcing our sacred geometrical shapes into a square holes, conforming or compromising. It’s about understanding reality and meeting it with love. For self and for others. A love that proves you understand the realities of busy lives lived from values that, although different from yours, are no less valid, necessary and meaningful. A love that’s willing to listen and be moved by the universe because you’re here for a reason. You’re not somewhere else, living in a close-knit traditional culture where they value the gift economy as essential to daily life. You’re here.

If we skip over the mainstream economy we will fail to understand fully the depth of conditioning and cultural influences inherent in both ourselves and our clients (no matter how conscious and aware we might be) therefor true communication and self-knowledge is limited as is a felt, direct experience of oneness and connection. If we bypass the mainstream economy without knowing it well enough to get a sense of our own power and right to exist, we also risk bypassing our potential and feeling like perennial outsiders. If we miss the learning contained within the structure of the mainstream economy to work in alternative economies, we are preventing and short-changing our own evolution.

Running a business in the dominant economy teaches us about the nature of the Self and Mind. It will show us how magnificent and infinite we really are. It leads to an understanding of truth, value, worth, community, presence, perception, trust, commitment, surrender and deep communion of the heart. And once we know these things, we can do it our own way for conscious business is an intimate and personal path to enlightenment.

*******

This article is not intended as direction to never enter into alternative economies (that would also be a tragedy! The earth needs this! We need you! The dominant paradigm must be challenged by the passionate rebels among us!) rather let it be an organic transition that comes from a foundation of (at least) a basic level of competence in business in the current economy. Let it come from solid ground and from service to the whole. Let it come from realisation.

So how do we do both? Step onto the path of business in the current economy while remaining rooted in the heart’s desire to be of service? It’s an ongoing exploration, constantly moving, flowing. There’s no wrong way or right way. Only your way. The answer isn’t important, it’s the asking of the question that matters most. And a willingness to keep on asking the question as new information, experiences, challenges and learning come your way. To return often in the midst of chaotic effort to ask, “How can I be of service? How can I give?” In this way, gift economy values are anchored and become the norm. In this way we slowly but permanently shift the dominant paradigm by bringing more light to business. We become the gift.

Below are 9 ways of working in the spirit of the gift while running a business in the present economy. It’s imperative to know your limits and know your self and be gentle in the face of other’s misunderstandings for this is truly a radical path. If we are not, the gift economy may be reduced to just another fancy marketing strategy designed to influence perception instead of a deep honouring of the sacred breath of life we’ve been given. I hope your heart finds solace and inspiration here and practical ways to express the spirit of the gift through your business. 

1. Have deeply loving customer service as your primary priority. 

I’ve been shocked at the level of service many businesses seem content with and I’ve been shocked by how poorly I’ve been treated as a paying customer at times. Your clients will have similar experiences. They will notice and appreciate your willingness to listen and understand their story. This is a gift in a world where many successful businesses don’t honour, value and respect customers and their money. You may feel that being kind and loving to every person who walks in the door is always present but this question asks you how you can bring even more caring and connection to every exchange on every level. 

2. Offer one of your services “by donation” or “in the spirit of the gift”. 

Getting clear on what you’re happy to give and what is definitely a paid service will help you identify where to start with what to give. You might have a weekly community yoga class for $5 or a monthly community get together, satsang, movie night, devotional music performance or something else. This way, you’ll always have an option for folks who want to connect with you but cannot afford full price. This way you’ll be nourished and inspired to continue giving when natural gratitude arises from your clients and students. If you’re a healer, consider forming a small group with other local practitioners to share regular, community giving back days – one afternoon every month or so where everyone offers low-cost sessions and treatments in one location. 

3. Give expansive time frames for instalment plans.

Many businesses do not do this, leaving little room for flow and negotiation. I’ve even heard flexible approaches denigrated by teachers of spiritual entrepreneurs as “betraying the many to give special treatment to the few”. There are good reasons for this but the reality remains in the life of a small business owner –  there have been 7 different higher-end programs and courses over the past 5 years I wouldn’t have been able to participate in were it not for the generosity and understanding of the facilitators. This is not about special treatment, it’s about responding to the realities of life. I remain forever grateful for the love the facilitators showed me and I’ve referred many clients to them because of this. Don’t offer extensions immediately – honour your own commitment to cash flow and covering expenses first but have this as a quiet option. Wait until you are approached personally. If someone really wants your services and they cannot find a way to make it happen financially right now, they will take action to connect with you. Trust them and trust their process. See what your heart and intuition say when the situation arises. Always be flexible when you can for it is a gift.

4. Ask for feedback and deal with all complaints and issues in a loving way. 

Ask your clients for their honest feedback – how can you improve? What worked for you? What didn’t work for you? Many businesses lack even a primitive platform for feedback and so are missing valuable ways to connect and deepen in relationship with their clients. Have a loving and supportive refund policy. Tell folks what it is and why it exists. Let them know refunds and credits are possibly in extreme circumstances. Assess these on an individual basis instead of having one blanket policy that is enforced regardless of the individual situation. If you don’t want to refund them, that’s totally OK but what can you offer to make them feel just a little better? How can you be supportive of them instead of dismissive (like so many business) if they are dissatisfied? How can you listen to the feedback they are giving you? This is a gift.

5. Be open to giving when your heart is called. 

If your heart really wants to work with someone but you know they cannot afford it, see if you can still help them while supporting yourself and the reality of your needs simultaneously. Can you give them mini sessions? Invite them to the community events? Give them a referral to a government service? Call them on a phone for a brief chat once a month or so? Whatever your heart feels to give. There are no rules and no limitations. Just make sure that it’s a genuine YES from your heart and that you’re not giving with any sense of obligation or rescuing as this can lead to resentment. And if you notice resentment building in relation to this particular client, let them know you can no longer keep supporting them as a gift. They will certainly understand and may have some ideas and suggestions themselves (perhaps they can give to you in some other way? Perhaps their situation has changed from when your relationship first began and they may now be able to pay you for your time?). 

6. Share interesting, excellent, informative and transformational stuff online. 

Share things that are of genuine value and bring more love to the world. Do not just talk about all the amazing things you’re doing in your business on social media. Give. Give. Give. Honour another practitioner. Honour your own teachers. Share a story of how much a certain book or practice has changed your life. Tell a story that’s restored faith in humanity. Celebrate a client. If you look, there are a 1000 ways to give and combat the narcissism that mediums like facebook create. This takes skill, time and thought to develop and helps negate the quick-look-at-me, blaring, hyped-up messages that are the norm online. Over time, people will notice the depth, stillness and integrity shared and associate it with you. This is a gift.

7. Be integral in giving as much as you can be. 

Do not give in order to get all the time. This is a deeply transformative and passionate enquiry that only you can find the answer to. Only you know the deeper motivation behind your giving and the purity of your intentions. It’s OK in business to give to get from time to time. In fact, giving to get is what business and marketing is all about. It’s the truth. Know when you’re giving to get and celebrate this, make this OK for yourself, understand that giving to get is the way of the current economy and of the society we find ourselves in. Giving to get is also how traditional gift economies work in the purest sense (tribal members give to get positive regard and public accolade for example. Or they give because their generosity ensures they will also be supported in the future when they need help). Don’t always give to get though or before you know it, every decision you make in business and life will be determined by what you will get out of it and this does not feel good. Give for no reason other than because you can occasionally. Give because it feels amazing to be of service especially when there is no hope of return. 

8. Give referrals. 

If you cannot help someone do your best to find another excellent teacher or practitioner to send them to. Don’t do this for an affiliate or referral fee as it changes the energetic. Do it because this other person is genuinely more skilled in a particular area then you are or because you personally have benefitted from and love their products or services. Do it because you want to help. Do it because you cannot benefit from this immediately. This is a gift and it shows you care deeply about another’s path and that you’re willing to take time to find out enough about them and their issues to give them something genuinely worthwhile.

9. Support a local charity or cause.

Is there a cause you’re inspired by and want to support? Some businesses choose to donate a set amount from every dollar earned or product sold. Others host fundraising community events for a cause or recent natural disaster. Perhaps you can find time to volunteer personally with hands-on work in your local community on a regular basis (reading to children or people in aged care homes for example) – this is my favourite option because of its immediacy. Guaranteed, it’s one of the fasted ways to bliss and you’ll leave your time volunteering uplifted and with a ton of new energy to devote to your business and life. Think about something that truly benefits those around you and how money you earn through your business could support this.

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Working in the gift economy is one path of many to enlightened relationships with each other and the Earth. Mainstream business is another and if you’re wanting to make enough money doing what you love, it’s the only one I recommend (at this current point of personal and planetary evolution anyway). Stepping into the gift and alternative economies as a reaction to what we see around us (and judge as destructive and ignorant) is an incomplete approach. At this point, it’s a utopian dream for many who live in cities and gift economy teachings are destined to enter lives, inspire greatly and then depart once reality kicks in (sometimes leaving a trail of lost and disappointed bodies behind). Keep going, keep giving in ways that feel good, keep living in service, keep sharing from your heart but be honest about where you and where the world are at. Come from a place grounded in the current reality and the love that’s already and always here. You and I right now are crumbling walls of separation and changing what it means to be in business.

Love, Mirror

MIRROR LIVING SHORT BIO

Mirror Living Business From The Heart 199x300 Guest Post: Why You Should NOT Work In The Gift EconomyDevoted yogini, gift economist, love bunny, living room dancer and closet songwriter madly in awe of any practice that takes us from our heads to our hearts. Mirror teaches authentic marketing for yoga teachers and healers and digs playing with puppets, swimming naked, crystal singing bowls and anything that even vaguely hints at offering the tiniest taste of divinity… Come join the community -www.businessfromtheheart.com or on facebook – https://www.facebook.com/mira.living

 
 

Guest Post: The Essential Guide to Pay What You Want Pricing

Tom Morkes headshot3 Guest Post: The Essential Guide to Pay What You Want Pricing

 

The Essential Guide to Pay What You Want Pricing

- Tom Morkes

In April of 2013, I did something a bit mad, and it’s changed the way I view business (and life) forever.

Before I explain, here’s some background for context:

I started building my personal website www.tommorkes.com in the fall of 2012. For the first 5 or 6 months I gave everything away for free.

No price tag – just take it.

In that time, I created a lot of content too: several blog posts a week, an 80 page book, a bunch of mini-guides and workbooks, a podcast, etc.

All for free.

In this time, I’d built of a list of about 150 readers.

Fast forward to the beginning of 2013, and I’m in my car listening to a podcast featuring the Vennare brothers of Thehybridathlete.com. They were telling a story about their successful fitness business, which was bringing in 6 figures a year. 

Cool, but no big deal, right?

But then they said something that blew my mind: 

They were making this money in a completely unconventional way: by letting their customers CHOOSE their price.

In other words: Pay What You Want (PWYW) pricing. 

I let the idea float around my brain for a bit and realize this is the technique I needed to use for my writing.

I still wanted as many people as possible to have access to my work, but also wanted to validate the worth of my writing (as in, I wanted to know if my writing was good enough to pay for).

My next book was a small ebook – a compilation of notes from a Seth Godin conference. After getting permission from Seth to share the book with my audience, I created a simple splash page on my website, uploaded the file to Gumroad.com, and let my 150 subscribers know I had a new, free eBook for them…
 
With one catch: for the first time ever, I gave them the opportunity to contribute to my creative work
??as much or as little as they’d like.

I expected to make nothing, but why not try, right?
 
The next day, I had $80 in my bank account.

“Wow – very cool…”
 
By the end of the week, $340.

“This is incredible…”
 
At the end of the month, I was closing in on $500.
 
“All for something I gave away for free. Amazing…”

Was it Just Luck?

Trust me, I get it.

This seems like a one off anomaly. As a random success story that doesn’t prove it can be repeated.

Normally, I would create a long list of examples to disprove this; to show it’s been done many, many times before in much bigger ways than what I did (including examples like Disconnect.me, Humblebundle.com, Radiohead’s In Rainbows album, Joost van Dongen’s $20k PWYW video game, Panera Bread’s PWYW based cafes, Perlin Winery in Berlins, and many others)…

But instead, I’d like to share a couple new ways I’ve personally used the pricing technique this year and the results.

How Pay What You Want Pricing Can Work for In Person Events with Expensive Overhead

In the spring of 2014, I co-launched a new business called TheFlightFormula.com.

The Flight Formula is a heart-centered business incubation program – it’s a 1 week, live, in-person training event to help you launch a heart-centered business from scratch.

I initially came on as a pricing consultant (and then latter as a cofounding partner) because of my work in Pay What You Want pricing.

My suggestion: let’s take Pay What You Want pricing to it’s edge.

In other words: let’s remove price altogether.

Now – to give a clear context for how crazy this is – The Flight Formula in person even had about $15,000 – $20,000 in overhead (housing, catered food, mentors and coaches, etc.). 

Removing price would be an insane proposition, right?

The results prove otherwise.

We were able to raise over $40,000 in commitments for the event. I write all about that experience here.

How Pay What You Want Pricing Works Even Better for Services Than Digital Products

A lot of people who happen upon Pay What You Want pricing immediately think it can only work for digital products.

What they’re unconsciously recognizing is that low marginal cost ought to make Pay What You Want more successful and lower your overall risk.

While this isn’t untrue, it misses a bigger point:

Pay What You Want pricing works best when there’s a personal connection.

To prove this, I tested Pay What You Want consulting this past year. After consulting with over a dozen people in March of 2014, from Argentina tourism companies, to African Telecom companies, to solopreneurs, to artists, here are the results:

The lowest contribution per hour of my time: $28.53

The highest contribution per hour of my time: $250.00

Average consulting rate per hour: $182.26

That means, on average, I was making more per hour than the average doctor or lawyer (here’s an article where I show the experiment and the results in more depth).

How (and why) Does Pay What You Want Pricing Work?

These results may seem incredible, but the reality is – it’s the result of basic principles in psychology and human interaction.

There are four primary reasons Pay What You Want pricing works:

1. Pay What You Want pricing removes the barrier to entry

Fixed-price products by their nature create a barrier to entry for consumers. By lowering the price to zero (or close to zero), you remove the barrier to entry.

Yet, while free destroys revenue, PWYW does not??people still contribute, and often more generously than you’d imagine.

2. Pay What You Want pricing removes the price ceiling

In an eye-opening interview I did with Ryan Delk of Gumroad.com, I found out something incredible:

Based on the results of multiple uses of Pay What You Want, Ryan discovered that the top 1-3% of our audiences contribute way over the average??so much so that they often more than make up for those who contribute the minimum.

“The interesting thing about Pay What You Want is that people fundamentally underestimate how engaged and excited the top 1 to 3% of their audience is about the things that they do…”

I found this to be true in my case.

When I released my first book as PWYW, the majority of my income came from the top 3% of my audience who contributed $50-$100 per download.

3. Pay What You Want pricing encourages impulse buying

The majority of buyers on the planet are looking for a deal.

When something is discounted – even if we don’t need the product or service – we often buy.

That’s an impulse buy and it happens to varying degrees for different people.

With PWYW, because we’ve lowered the barrier to entry, we can inspire the same impulse buying (ESPECIALLY when we make our PWYW offers limited time events).

4. Pay What You Want inspires generosity

Contrary to popular belief, people are not self-serving by nature.

The title from a Harvard Business Review article says it best:

“When the Rule Is “Pay What You Want,” Almost Everyone Pays Something”

The study goes on to explain that 95.95% of customers contribute money when paying is optional. The question is…how MUCH do those 95.95% actually contribute. Matt Homann of LexThink is a consultant for lawyers, accountants and large corporations like Microsoft. 

He switched from fixed price invoicing to what he calls You Decide Invoicing.

Here’s what he had to say about his results:

“Since I’ve been doing this, my sense of the value I give my clients has increased. I’ve recognized that my clients don’t care about the time I spend working for them, but rather the results they get from working with me. Quantitatively, my income has doubled in the past year, because clients pay me more on my blank invoices than I would have charged them. I’ve also increased my per-engagement price (when I’m asked to give one). I know charge roughly three times what I would have quoted before my pricing experiment began.” Source: You Decide Invoicing

Double your fixed rate price…

How’s that for generous?

How to Apply Pay What You Want Pricing to Your Product or Service

Now it’s time to apply the Pay What You Want pricing to your products or services.

This is the framework I use and teach all my clients: what I call The 6 Step Perfect Pitch Framework

This framework will show you HOW to offer your product or service so people not only contribute, but contribute GENEROUSLY to your offer.  And at the end of the day, that’s what we want, right? 

So let’s get to it:

1. Clarify the Offer

The same rules apply to fixed priced products and services as they do to PWYW products and services.

If people don’t know what you’re offering, how can you expect them to contribute (let alone contribute generously).

2. Show the Customer You’re Human

We don’t give to corporations. We give to people.

If Applebees rolled out a line of PWYW appetizers, why would anyone pay extra?

But if the artisan baker down the street, who you’ve known personally for years, is offering his hand-crafted baked goods as Pay What You Want, now all of a sudden there’s a reason to contribute (and generously).

A couple ways to show people you’re human online:

add your picture to the website and sales page

write casually and passionately (i.e. not like a robot)

3. Appeal to Idealism

Pay What You Want pricing is all about giving people a reason to contribute generously.

We do this by appealing to virtue, generosity, karma, and any other ideal that encourages giving. Sometimes, just mentioning the word is good enough. Other times, we need to elaborate on what and why we’re using PWYW.

Remember: people buy stories.  So give them a good story that appeals to their idealism (they’ll be more willing to contribute and to spread the word).

4. Anchor the Price

If you’re selling a premium product as PWYW, you need to anchor a premium price in the buyers mind.

Price anchoring is a psychological technique marketers use to get you ready to buy expensive stuff, like iPads – a $500 iPad by itself is ridiculously expensive compared to a laptop (it doesn’t even do as much)…

But if we compare it to more expensive iPads – up to $800 or more – it’s not so expensive.  This is price anchoring (showing really expensive alternatives so your original product doesn’t seem so expensive).

With Pay What You Want pricing, since the price is up to the buyer, we need to anchor our product or service to similar but premium fixed priced products.

5. Steer the Customer to the Right Choice

Once you’ve price anchored the product, you need to actually steer the customer to the right choice.

PWYW is ambiguous in some ways, and ambiguity scares people.  We need to be clear not only with our offer (see above), but with what an average contribution would look like, and, even better, what a generous contribution would look like.

6. Rally around a Purpose

When people see a Pay What You Want item, they’re going to ask themselves (either out loud or subconsciously):

Why let me choose the price?

Is this a trick / ploy / ruse?

That’s why it’s so important to rally your PWYW pricing around a purpose – to explain the purpose behind the pricing, which is just as important as explaining clearly the product or service.

How?

Explain why you’re using the pricing technique; show your customers why the pricing technique is important (to them and to their community)

7. (BONUS) Add Charity to the Mix

While it’s true that a simple PWYW offer can increase revenue compared to fixed-pricing, it’s statistically proven to be more effective when you add charity to the mix. This ties into the ‘appeal to idealism’ I mentioned earlier but creates an even greater incentive to give and to give generously.

Of course, you need to integrate charity authentically, honestly, and congruently with your message, otherwise it comes off shady or forced and people won’t contribute.

No, you can’t ‘game’ the system with charity, so only use it if it fits.

Next Steps

So that wraps up a brief overview of Pay What You Want pricing.

If you’re interested in learning more, I created a free 7 part email series to go into each of these topics in more depth, including case studies, copy-and-paste PWYW pricing copy (for your sales page) and more.

Join the free 7 Day Pay What You Want Pricing Crash Course here.

Other than that, let us know in the comments below what questions you have or if you’ve tried out PWYW pricing – what your results have been.

Thanks and see you in the comments!

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/

 

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.