Many of you have probably heard of Pay what you want (PWYW). Many of the Indie Bundles use this payment scheme, the Humble Bundle being the most famous of the group. Basically it’s an opportunity for you to purchase something for the value you think it’s worth.
Some places will require a minimum starting amount in order to purchase, but many do not. Other places promise to donate a portion of your money to a charity. There is a lot to making this particular payment method work for you. It’s something that we at FlamingLunchbox are considering heavily as an option for our business model.
So we did a little research. We checked out the Humble Bundle Statistics page to see how PWYW was working for them. The lowest average purchase was $4.09 and the highest $9.18 per purchase. Not too bad really considering their total purchases range from 81,583 up to 599,004.
However, FlamingLunchbox is not supported by such communities like the Humble Bundle is. So I looked into some other articles from individuals enacting this payment method to find something more comparable. One particular article was referenced on Techdirt. The independent programmer recommended it overall, however did mention one thing that stuck with me.
I think the main reason why so few people chose to pay for Proun(his game) is this: the free version did not require a Credit Card transaction and was thus way easier to download.
So for most PWYW options, especially for independent developers, it would be important to require a minimum payment.
But requiring a minimum payment still might not make this work for everyone. Many people might just simply pay the minimum payment and then feel good enough that they’re helping in that small way to assist a small business. Some other incentive might be necessary to make something like PWYW work even better. I found that answer here on one of the Discover magazine’s Blogs. They mention one particular aspect, which the Humble Bundle also uses, in order to provide even more incentive to the average customer.
But when customers could pay what they wanted in the knowledge that half of that would go to charity, salesand* profits went through the roof. Around 4.5% of the customers asked for a photo (up 9 times from the standard price plan), and on average, each one paid $5.33 for the privilege. Even after taking away the charitable donations, that still left Gneezy with a decent profit.*
After our review it seems that PWYW can work well, especially for independent developers. That is, as long as you require a minimum payment and donate a certain percentage of your profits. But then the question remains, whom would FlamingLunchbox donate to?
Robey thinks that a suggested payment along with strong differentation between free and paid versions would work instead of requiring a minimum. What do you think?