This transcript was generated from the episode audio and may contain minor errors.
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Should you offer a pay what you will price? Should you be like, hey, potential customers, I have this item or service or whatever it is. I've got something for sale. I would love for you to buy it. And you can tell me what the price is.
Like you decide. I don't want to make that decision so you can decide. Or maybe you pay what you're able, whatever you think it's worth. You know, there could be a few different ways to do it. Should you do that?
Like as a business owner or a side hustler, when you're thinking through your process of setting up payments, should this be an option? And we're gonna hear today from a listener. They started a pin to paper initiative to connect people through snail mail. So that's pretty cool. Interesting business model.
Seems like it's starting well and they're wondering, let's see, what is it? What is it they're wondering? Well, they're wondering, you know, how will it scale? Can it scale? And what I think about the choose what you pay price model?
Okay, well, I'm gonna give you a direct opinion as I like to do. It's not helpful to give you a wishy washy opinion, right? So it's fine if you disagree, but I will be direct. I'm gonna give that detailed answer followed by the detailed question from our listener. Stay tuned.
It's coming right up. [Music]
Hi, this is Nikki from Atlanta, Georgia. I started listening to the show about a year ago and it's been so inspiring to hear so many successful side hustle stories. In 2018, I launched the XO project, a pen to paper initiative to connect humans offline through snail mail. The idea was to put my interest in calligraphy to use by writing short greetings on behalf of others.
It's a simple process. A person submits their message and details through an online form on my website. I calligraph the message on a card and address the envelope. Add postage and mail it out. At first, I offered this for free to test the idea and refine the process.
Now it's offered at a choose what you pay model to keep it accessible. The cards are branded and have a message on the back inviting the recipient to participate as well. 59 notes were mailed out the first year of the project and 67 notes were sent out last year. My question is twofold. How do I figure out who was the best audience for this and how might a service-based project like this scale would also be curious what you think about the choose what you pay price model?
Thanks so much and I look forward to hearing your thoughts and any other suggestions. - All right, I love the project idea. I love the personalization, the artistry. I just love people who are doing cool things and they're motivated by their art and by making the world a better place in their own way. So well done.
Let's look at the questions. So does it scale? How might it scale? I guess my first thought is I'm not sure it will. Not everything needs to scale and this seems to me to be an example of something that might not scale and doesn't have to.
I guess if that's your primary goal, maybe the way it scales is by creating other products that aren't all hand-drawn like while continuing to offer these personalized ones. That's probably the way that that would happen. But I think it's perfectly acceptable to keep this as a project that you promote and get attention for while growing your main service which looks like is spot calligraphy. That's what I saw on the website when I went to research this project. So that's what I think about that.
As for pay what you will, I don't actually think it's a great idea. I think it's an experiment. It can be a good limited time offer. Pay what you will for the holidays or something or for a week. But it shouldn't be your main pricing model.
And the reason is part of choosing what the price is, that is part of designing the business. That is part of doing the work of creating an offer for your service or product. And so you don't wanna pass that work on to the customer and make it their burden. And it is a burden if you think about it because most customers just have no idea what to do in that situation. They're like, well, I don't know.
Should I just offer a dollar? Well, that's cheap. I don't wanna do that. But I don't wanna offer too much either. So they have to go through this whole complicated process of trying to figure out, okay, what is the right decision here?
And it just kind of puts people off. Actually it creates like a lot of friction which is counterintuitive because you imagine it would just resolve the friction. You imagine it would be like, well, price is the object, pay what you want. But for a lot of people, it actually makes it more complex, more complicated. So I tend to think it's just better for you to figure out what it should cost, right?
And you can also have sales, discounts, coupons. You can change your pricing. You can have upsells. There's so many different fun and creative things you can do with pricing. But I tend to think that pay what you will at least as a long-term pricing model is not a great idea.
Again, for most businesses, maybe there's some exception. That's my opinion. Listeners, let me know what you think. If you have a question or a scenario, sidehustleschool.com/questions. We'll continue to feature them throughout the year, along with updates from other listeners as they launch and grow their projects.
I'm so honored to be able to make this show for you every day. Thanks for being out there. My name's Chris Guillebeau. This is "Side Hustle School." [Music]
From the Onward Project.
