This transcript was generated from the episode audio and may contain minor errors.
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Hey there, I'd like to welcome you today to the daily podcast known as Side Hustle School. It is community organized, organically grown, all designed to help you make extra money without quitting your job. Not just extra money, but extra passive income or extra income that is an asset for you that gives you more of what you really want. Whether it is freedom or a creative outlet or retirement savings or whatever it is for you. That's your choice.
That's what we're all about. And I've got a question for you today about pricing. Okay, a little bit controversial here 'cause I've talked about this before in the past. I always get emails about it. Today's listener is thinking of letting her customers set their own prices.
Whoa, is this pay what you will pricing model revolutionary or risky or another adjective that starts with an R that I haven't yet thought of? We'll see. I tried this once myself or I should say I was going to try it. And then a good friend of mine, Brian Clark, talked me out of it. So I'll tell you a little bit about that.
And also why I now believe this isn't the right answer for most projects. So just to kind of foreshadow my answer, I'm not a huge fan of pay what you will. Of course, there are always exceptions, but let's talk about the bigger picture right after this message from our sponsor. Thank you, sponsor. And thank you listeners.
You're awesome. [Music]
Hi, Chris, this is Natalie. I've been following your show for a while, still enjoying the stories and questions from fellow hustlers. I have been selling a calligraphy set and several add-ons for years. Makes a small amount of money, usually $400 a month on average, but up to $3,000 a month during the holidays.
And I've always struggled with pricing, but lately I've been thinking, why not let my customers decide? I like the pay what you will model, and I don't think my customers will choose a price that's so low that I don't cover the costs. If nothing else, I could test it, right? I guess what I'm asking is, is there any reason not to let customers choose the price? Thanks, Chris.
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Well, I absolutely respect creative experiments, to be clear. So thanks for the question. Really glad to know it's been going well so far, up to $3,000 a month during the holidays. That's fantastic. We'd love to see that become $3,000 a month throughout the year, and then $9,000 a month or more during the holidays.
So maybe for a special promotion, or as I said, creative experiment, it's a good idea to offer your pricing like this. But most of the time, I've really become convinced from lots of smart people that it's not great to let your customers make that decision. First of all, without some clear direction, they are almost always going to select a lower price than you might choose. In other words, they would be happy to pay your higher price. They would still be buying from you.
They would still be a happy customer, but you have to be the one to kind of set that price. They're not going to willingly say, "Here's a bunch of extra money." They also don't necessarily love the model. So here's what's interesting, because you might think, "Well, I don't necessarily need to make a whole lot of money per customer, and I'm going to be earning a lot of goodwill by letting them set the price." But actually it might be kind of stressful. You might stress them out because, or even cause some of them to not purchase at all, because they don't know what to choose. It sounds crazy, right?
But it's true. Like, as I said a long time ago, I was going to try this with something, and my friend Brian Clark, who's very smart, he's started multiple seven-figure companies. And he said to me, "That's a terrible idea. Why would you abdicate this important business decision, which is pricing strategy, to your customers?" He was like, "That's your job." And so, as I said, over time, I've come to agree with Brian. The question is, is there any reason not to let customers choose their price?
There are several reasons. So nothing wrong with a creative experiment, but generally I think you're going to be better off, and your customers will actually be happier if you take the time to figure out what is the appropriate pricing, and then not make it too complicated. Just put that checkout button right there. Don't force them to make a lot of decisions. Encourage them to click that checkout button and input their credit card, and then be happy, right?
That's the goal. So my thoughts there. Listeners, if you've got a question, or an experience of your own, or something you're trying to figure out or navigate, come to www.sidehustleschool.com/questions. We have got a lot of cool stuff planned for the year, so I hope you will join me. New episode comes out every day.
My name's Chris Guillebeau. This is "Side Hustle School." [Music]
From the Onward Project.
