How would you like to pay for that, ma’am?

Conventional wisdom has it that when someone wants to buy goods, they go to a retailer, purchase a product at a predetermined price, and then become owner of that product. We don’t often think of different ways for this transaction to take place.

But what if there was another way?

Recently, our Creative Technology Lead, Brady O’Halloran pointed out an emerging trend in the gaming industry. There is a whole new range of ways to exchange goods.  Transactions aren’t always based on the traditional supply and demand principles. That is, a price of a product isn’t only determined from the supply in relation to the demand. Rather price is dictated by a range of other variables, such as the amount the purchaser wants to pay, a consumer’s online experience, or community motivations.

Once we started investigating these payment models, it became glaringly apparent that deviations in the supply and demand model weren’t only confined to the gaming industry, but reached beyond to touch industries such as music, lifestyle, electronics, groceries, utilities, movies, charity, news and social media.

And judging from interest in these new payment models, it appears that consumers are not only open to new ways of paying for things, but also are also enthusiastic about the opportunity to choose.

Take for example, Penny Arcade, a webcomic that focuses on video game culture. Recently they undertook a Kickstarter project to rid the site of all advertisements. Commenting on the project, organisers said: “People ask how they can support Penny Arcade in a way that doesn’t involve shirts or looking at ads, and we think we’ve found a way.” Their solution was to rally the community to pledge a dollar amount to the organisation, which would gradually go towards supporting the site with revenue in absence of advertisements. Further, when an amount of money was pledged, the donator also receives goods in return. In total the campaign managed to raise (and sell) over $528,144, from just over 9000 backers.

Another example is in the field of utilities. One Big Switch is rallying against the big guys by building community groups who put pressure on the major corporations to reduce costs of bills. It launched in Australia last year and its first campaign, targeting the cost of mortgages, attracted the likes of 40,000 people. It successfully discounted loans for all participants shortly after. Just one year on, it has over 300,000 members and has taken on gas, broadband and electricity industries.

Though One Big Switch is giving consumers more opportunities to dictate price, it’s not quite the ‘Pay What You Like’ model. This method relies on audience’s honesty and allows them to choose the product’s price tag. But, any reasonable businessperson would tell you that it’s a load of rubbish. You couldn’t trust people to dictate their own price range; it’s no way to make money. Right? Wrong.

Gaming organisation Humble Bundle managed to raise over $19 million in just two years by allowing consumers to pay what they like for packs of indie games. Further, the consumer was then able to split the revenue between charity, the game developers and Humble Bundle organisers. The number of copycat bundle on-sellers, such as Indie Royal and Little Big Bunch, since it’s inception can also serve as measure for success of this payment model.

These new options have led to a fertile buying environment that focuses on giving people a real motivation to buy, rather than simply defining the terms of purchase. In this way, it’s no longer about the individual benefits that the consumer receives from purchasing, but also about the wider community benefit – for everyone from charities, fellow consumers, to the retailers and independent business people.

So, if we know that customers are enjoying their new sense of choice… how can we apply these lessons to improve our client’s digital service offering?


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