Digital Marketing Strategy: Panera’s PWYW

You want your next big idea to be both creative and profitable. Who doesn’t? Striving to “wow” consumers with your brilliant, original tactics means very little if you don’t have the numbers to back them up.

This’s why I looked into the genuine value of a strategy known as “pay-what-you-want.” Made famous by Panera Bread and other socially-conscious cafes, this marketing idea has potential. The real question, of course, is whether it can actually work for you.

Was Panera’s PWYW experiment a success or a failure??

That people don’t want to pay more than they believe something is worth when others around them are demonstrably taking advantage.

That suppliers aren’t going to just give you things.

That apparently Panera wasn’t willing to use the presumably more-than-healthy proceeds from their ordinary stores to prop these “cafes” up.

Those employees aren’t going to work for free.

That it takes a broader swath of a particular sector to implement the same gift economy so not just 1 or 2 are a small channel for a flood of people whose basic needs are not met.

It also shows that education across the board (from the CEO's to the shareholders, to the management and the customers) is sorely needed.

Would the outcome have been different if Panera was selling a digital product?

if Panera were to sell digital products and do the same Pay What You Want(PWYW) experiment, the company would not have survived at all. Although, as a fact; It has been studied and observed that there was an increase in the customer traffic and sales were high during this experiment but, keeping a practical approach is paramount for any business to run and survive. In today's era, where almost everything is digitized, there is a possibility that people would not pay for -gadgets or digital products at all and would leverage the opportunity. For instance, students who would not have much allowance or could not afford gadgets- would take the products, and thus, this is how it would become an addictive phenomenon.

Therefore, Panera could use one scheme to sell digital products- the company could host monthly or weekly contests, where customers participate and get the option to pay their price. Thus, by targeting only a limited inventory, the company can gather a significant hype and refrain from running in losses.

How could have Panera improved its PWYW strategy? What digital tools could they have employed to enhance its success?

Create a Suggested Price: The big idea is that “pay-what-you-want” strategies can be summed up in two words: suggested price. You give consumers the freedom to choose how much they pay for your product. Will they pay above or below the recommended price? That depends on the customer.

Research on what Motivates the customer to Spend: Overall, pay-what-you-want is an effective tactic for capturing the audience’s attention and turning customers into influencers. If a group of people who have bought the company's product is excited about their purchase, then that's it. Consumers will start having conversations about the company, thus extending its reach. It all begins with a willingness to give back in a unique, head-turning way. Moreover, when customers are shown what they like or tend to likely buy, they will willingly like to pay for the product.

Social Media: Today, almost everyone uses some social media source, be it for entertainment purposes or just for fun sake. Thus, there is a growing trend of using these platforms for promoting businesses. For example, Panera can hire a group of people who can handle its social media handles and make sure that they are running and are active. By going live weekly, interacting with their customers, or doing giveaways, the company can gather publicity and attract people worldwide.