The good old days when marketing managers could manipulate four competitive levers might be disappearing. The famous “4 Ps of marketing”, product, placement, promotion, and price, are shrinking to three with the new trend emerging in the United States. We're talking about 

Pay What You Want, a concept where the seller allows the customer to decide the price

Crazy? It doesn't seem so. According to the site TrendReports, this new trend is seeing considerable success in the American market. And it's not just in New York, typically open and ready for any innovation, but a phenomenon well-distributed across the country.

The “pay what you want” (PWYW) philosophy has been applied to various types of businesses, big and small alike. TrendReports cites the example of the band Radiohead, which decided to sell its latest album without a fixed price. The result was an average payment of $8 per copy. Few fans chose not to pay.

Switching sectors, Panera Bread, a restaurant chain, adopted the same technique by simply suggesting a price and leaving the final choice to customers. In this case, it was observed that 20% of customers chose to pay more than the suggested price, while another 20% decided to pay a symbolic amount.

In New York, on the other hand, the trend seems to work very well for gyms and yoga classes; in some cases, the entire business follows this model, while in others, only certain days and times are offered under the PWYW mechanism.

Generally speaking, Pay What You Want seems to be a useful mechanism for small businesses aiming for a trusting and long-lasting relationship with the customer. Everything indeed relies on the user's recognition of value and willingness to pay for the service. It is therefore clear that businesses heavily centered on the product are not suited to this solution, as the absence of service would likely lead the customer not to recognize a price high enough for the sale to be economically sustainable. For instance, it seems difficult for a supermarket to adopt this sales mechanism.

It is not yet clear whether this trend is only temporary or if it will endure, nor if those currently offering it will be able to sustain and make it profitable. What is certain, however, is that such a system can represent a valid promotional solution for a newly opened business, which can position itself innovatively by simply letting the customer choose the price.