A new pricing strategy that allows buyers to dictate prices can lead to higher profits; if some of the proceeds go to charity.
The strategy is called “pay what you want,” and has gained a foothold in several markets in the last few years. For instance, Radiohead famously let buyers name their own price for the band’s “In Rainbows” album, and Panera Bread has recently opened a restaurant in which customers can pay however much they think the food is worth.
This is an interesting article, the study shows that this strategy can be more profitable for certain products, specially for companies that are trying Corporate Social Responsibility strategies. It also provides interesting data, such as the fact that under this pricing strategy people are willing to pay more if some of the proceeds go to charity, this is probably because of guilt of not giving enough to charity. Click here to read on.