Growth January 13, 2020

Gain customers by starting with a pay-what-you-want model

Growth Bites @growthbites

Gain paid users and important data by launching with pay-what-you-want, and then changing your pricing later.

Gregg Blanchard of PeakFeed ($1,000/mo) was able to quickly get his first 115 paying users this way. It also gave him lots of good user testimonials for his marketing efforts. He recommends a pay-what-you-want model for people who are just getting started, but says you'll hit a ceiling pretty quickly. Today, he uses a standard tiered pricing structure, which he based on the data he got from his pay-what-you-want users. And he still uses his testimonials to inform his marketing message and gain insights into his key features.

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  1. 2

    Does anyone have successful experience with this model? I used to write tabletop RPG adventures and sell them online. At first, I tried using a PWYW approach and I probably had 1 paying customer per 400 downloads. With a hard price, I had many fewer downloads (obviously) but made orders of magnitude more revenue.

    Curious what other people's experience is!

    1. 2

      @MattDrake I don't remember who it was but I recently read about someone doing PWYW with a minimum and they said it worked pretty well. Maybe the minimum is key.

  2. 1

    I tried Pay What You Want for over a year; Flookup earned about 7 dollars in that time.
    2 months after switching to a regular subscription model, I crossed $1000 a month barrier.
    I don't know how the guys who use the PWYW model make it but it certainly didn't work for me. My hypothesis is that you need to be well known before you adopt that model, if you want success.

    1. 2

      @getflookup - Interesting theory, that could totally be true. I think what Blanchard said about transitioning away from PWYW after a short time is an important element, though, and could be why it worked for him.

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