While it can be benefical at launch, pay-what-you-want pricing often reduces conversions. But with a small tweak, sales can be increased substantially. Consider allowing customers to choose from a pre-determined list of prices.
While studying pay-what-you-want pricing, researchers found that allowing customers to pick from three or four prices (as opposed to any price) actually boosted sales considerably. In fact, sales went up so much in the studies that this pricing model was beneficial even when people were paying less for the products. Put simply, the pick-your-price model gives customers a sense of control and they feel like they're getting a deal, yet it requires very little mental effort (unlike pay-what-you-want). Interestingly, the researchers also found that it is twice as effective as a normal fixed-price promotion at the same (average) price. It's certainly worth testing, as long as you only sell one product at a time. For best results, make it clear that customers can't pick any price. And consider adding an indicator for the most popular price.
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