4 ms·

Do name-your-price models yield revenue?

13 points by ananddass 14y ago

psc 14y ago
I'd be curious to see if "name your price as long as it's not $0" options are any more successful—maybe entering payment details is too annoying for users, so given the $0 option, they'll take the least time consuming path.
- ananddass 14y ago
  Any thoughts on the boundaries of A/B testing pricing? It can be construed as very sketchy if you show one set of visitors a certain price and some other another price point.
  - jrs235 14y ago
    But not if your test is a control of the current setup of no anchor point and your test condition to be "support us by donating $x" where x is say $10. This isn't as sketchy because its not an actual price since its not mandatory and is still only a donation. You're not changing the price, you're changing the donation verbiage.
biot 14y ago
"By the way, there are two exceptions to the name-your-price models that seem to be working in the marketplace currently; Kickstarter and auctions. I suspect that social proof that there are others backing a project motivates Kickstarter users to name a price (starting at $1 minimum bid)." Kickstarter is name-your-price in the same way that McDonald's is: small fries costs $X, medium fries $Y, and large fries $Z. Choose X, Y, or Z, and get the corresponding sized item. On Kickstarter, you can't choose to contribute $1 yet still receive the same item as the person who contributes $100.
- ananddass 14y ago
  Correct. Hence the analogy to airline seats. This is not really name your price. Kickstarters approach is mainly to segment the donors by commitments
- dfguo 14y ago
  Humble Bundles is an example that name-your-price model works for certain goods when you have fine-tuned the mechanisms. Name-your-price model works on goods that consumers are expected to pay. I don't think that works with donation.
Groxx 14y ago
I would argue a large part of the problem with essentially a "donate" button is that the flow is all wrong for a service provider, especially one that basically only has a one-time-setup cost for implementation. Consider a likely sequence for someone who goes through the whole process: * X visits your site, is mildly intrigued. * X notices the donate button, passes it up because you have provided no real motivation for them to do so * X gets an API key and pokes at it lightly * X integrates * ... time passes ... * X is appreciative of the time saved, and might give you money... IF they saw the button right then. ELSE more time passes without paying. I haven't seen filepicker.io's implementation (which has since been taken down, apparently), but did they include a 'donate' button in the API documentation? Did they email people after X time had passed, or Y API calls? The vast majority I've seen never take these steps, they just slap a 'donate' button on the site and wonder why it doesn't make them rich. If they didn't repeatedly try to poke people, it's out of sight and out of mind. The hallmark of any good service, really. It's unfortunate, but not surprising, and I wish I knew a more reliable way to get money out of people who are appreciative.
- ananddass 14y ago
  Groxx you make a great point. We had the donate button only in the registration page when the API key was generated. Not in the documentation page not did we do a time lapsed reminder. May be the outcome would have been different.
greg_bt 14y ago
There is a large difference between asking someone to name a price and asking someone to donate. In the first case you are forcing them to pay for a product (even if they pay $0). In the second case you are hoping they feel charitable. The Humble Indie bundles come to mind as a nice way for people to name a price, given their popularity I'd guess they are doing something right.
johnrgrace 14y ago
Yes, go look at the Humble bundels.
jrs235 14y ago
Did they consider changing the wording to say "support our product, donate $10"? In other words set the anchoring point to something other than $0. It'd be interesting to see if that helps.
- ananddass 14y ago
  No. We had left it open ended and that didnt work at all!

13 points by ananddass 14y ago

psc 14y ago

I'd be curious to see if "name your price as long as it's not $0" options are any more successful—maybe entering payment details is too annoying for users, so given the $0 option, they'll take the least time consuming path.

ananddass 14y ago
Any thoughts on the boundaries of A/B testing pricing? It can be construed as very sketchy if you show one set of visitors a certain price and some other another price point.
- jrs235 14y ago
  But not if your test is a control of the current setup of no anchor point and your test condition to be "support us by donating $x" where x is say $10. This isn't as sketchy because its not an actual price since its not mandatory and is still only a donation. You're not changing the price, you're changing the donation verbiage.

biot 14y ago

"By the way, there are two exceptions to the name-your-price models that seem to be working in the marketplace currently; Kickstarter and auctions. I suspect that social proof that there are others backing a project motivates Kickstarter users to name a price (starting at $1 minimum bid)." Kickstarter is name-your-price in the same way that McDonald's is: small fries costs $X, medium fries $Y, and large fries $Z. Choose X, Y, or Z, and get the corresponding sized item. On Kickstarter, you can't choose to contribute $1 yet still receive the same item as the person who contributes $100.

ananddass 14y ago
Correct. Hence the analogy to airline seats. This is not really name your price. Kickstarters approach is mainly to segment the donors by commitments
dfguo 14y ago
Humble Bundles is an example that name-your-price model works for certain goods when you have fine-tuned the mechanisms. Name-your-price model works on goods that consumers are expected to pay. I don't think that works with donation.

Groxx 14y ago

I would argue a large part of the problem with essentially a "donate" button is that the flow is all wrong for a service provider, especially one that basically only has a one-time-setup cost for implementation. Consider a likely sequence for someone who goes through the whole process: * X visits your site, is mildly intrigued. * X notices the donate button, passes it up because you have provided no real motivation for them to do so * X gets an API key and pokes at it lightly * X integrates * ... time passes ... * X is appreciative of the time saved, and might give you money... IF they saw the button right then. ELSE more time passes without paying. I haven't seen filepicker.io's implementation (which has since been taken down, apparently), but did they include a 'donate' button in the API documentation? Did they email people after X time had passed, or Y API calls? The vast majority I've seen never take these steps, they just slap a 'donate' button on the site and wonder why it doesn't make them rich. If they didn't repeatedly try to poke people, it's out of sight and out of mind. The hallmark of any good service, really. It's unfortunate, but not surprising, and I wish I knew a more reliable way to get money out of people who are appreciative.

ananddass 14y ago
Groxx you make a great point. We had the donate button only in the registration page when the API key was generated. Not in the documentation page not did we do a time lapsed reminder. May be the outcome would have been different.

greg_bt 14y ago

There is a large difference between asking someone to name a price and asking someone to donate. In the first case you are forcing them to pay for a product (even if they pay $0). In the second case you are hoping they feel charitable. The Humble Indie bundles come to mind as a nice way for people to name a price, given their popularity I'd guess they are doing something right.

johnrgrace 14y ago

Yes, go look at the Humble bundels.

jrs235 14y ago

Did they consider changing the wording to say "support our product, donate $10"? In other words set the anchoring point to something other than $0. It'd be interesting to see if that helps.

ananddass 14y ago
No. We had left it open ended and that didnt work at all!