A new Dimension to Pricing Strategies and what i learnt..

Marketing for some just seems like a mythical art with a lot of big buzz words that scare the average small or micro business owner away. In fact, it can be a very daunting task for Marketing professionals but it is a fundamental part of any business, if it wants to succeed and thrive. Marketing is the commercial arm of your business that actually does the work of generating revenue. Sales is a part of Marketing even though many of my professional colleagues might beg to differ and that is why Sales and Marketing are always lumped together as one role, which sometimes could be confusing.

So in order to improve myself professionally and learn new skills, i enrolled in a an online Specialization Course on Coursera for Digital Marketing. I Just completed the First Course ' Marketing in a Digital World' and the last module was on the Concept of Pricing in the Digital Marketing Landscape.

A Pricing Concept was discussed with Case Studies and Exercises and it is called the ' Pay What You Want' Pricing Strategy or PWYW for short. PWYW simply means allowing your customers to determine what price they are willing to Pay for a Porduct or Service. This concept has actually been used in other markets and we discussed the Pros and Cons of using such a strategy, using a Case Study of a Rock Band called ' Radio Head' to sell one of their album sales online. Once Customers reached the Payment option for buying the album, They were asked to pay whatever price they want for the album. This strategy caused quite a bit of controversy and conversation about the Album and for some this was a welcome development and for some this was not. A few conclusions were drawn at the end of the module:

• PWYW is a better used as a form of Sales Promo over a short period of time
• PWYW will not work as a long term Pricing Strategy
• PWTW is more effective when tied to a charitable cause
• PWTW works better if a suggested price is given and customers are asked to pay higher or lower, whatever their choice

Since the case study used was a foreign one, i decided to implement this pricing strategy for an online business @theaccessorieslounge.ng on Instagram for an Independence Day Promo that would last for 24 hours. I went further by offering this pricing option to ONLY existing customers of the business on Whatsapp to see if there would be interest and people would participate. Database had 50 phone numbers of customers.I sent a Whatsapp Broadcast message and Text messages to these customers as a form of awareness drive for this Promo and waited for the orders to roll in. For every item posted on the Whatsapp Status, a suggested price was given and customers were encouraged to bid higher or lower and if no one else, had paid for the item, they could have it at the price they suggested. These were my results:

• Only 10 existing Customers actually showed interest in the PWYW promo
• 7 Bid lower, 2 bid higher and 1 offered to pay the suggested price

These are my conclusions from the results of the PWYW independence Promo :

• PWYW pricing strategy should only be used for a short period of time in the Nigerian Market
• Nigerians if given the chance, would rather pay lower for a product than higher. After all, bargaining is and will always be part of the buying mentality of an average Nigerian

Does this mean that PWYW should never be used in the Nigerian Market? Yes, it can but it has to be tweaked and the Nigerian buying mentality has to be taken into consideration. I also think the PWYW strategy would work better for a more established brand and Yes....maybe if tied to a charitable cause, it would work better....though its not a guarantee in the Nigerian Market.

So would you try the PWYW pricing strategy? Let me know in the comment section... I would love to hear from you