Letting customers set your price sounds crazy. But Radiohead made a $10 million success out of letting customers name their own price to download their album, In Rainbows. Others have experimented with this business model, too. Here is one of the most interesting twists I’ve read: let your loyal customers help you determine the right price point for you next release.
South African BLANKbottle has gone a step further. The boutique winemaker’s founder, Pieter Walser, sent 20 cases of its latest premium white wine Moment of Silenceto loyal customers on consignment, asking them to evaluate the wine and then pay him what they thought it was worth. They paid up to ZAR 90 per bottle (USD 11.80 / EUR 7.50), and the average price came to ZAR 50. Since BLANKbottle aims to exceed customers’ quality vs. price expectations, the wine went on sale to the public at a price of ZAR 40.
Walser, for his part, got a high return on the wine he risked in the venture. In addition to the publicity he garnered, he determined a new product’s price point based on the actual purchasing decisions made by the winery’s best customers. Feedback that’s likely to be more valuable than the opinions volunteered by focus groups or market research experts. And by involving them in such a fundamental business decision, he no doubt increased brand loyalty among the winery’s core customer base. One to try out with your own best customers!
Source: Springwise.
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
What a hoot! I have been thinking about describing what I have to offer, stressing amenities and value, and asking what the next bargain hunter was willing to pay for that room package rather than offering a price for them to reject flat out. I can’t sell a room for less than I pay to heat it but it should be interesting to see what numbers potential guests come up with.
Instead of offering this to the general public, why not take the approach that the winemaker used: involve your most loyal fans.