Paul Hunt

President

Pricing Solutions

http://PricingSolutions.com

Paul Hunt is the president of Pricing Solutions and has specialized in pricing for more than 20 years. During that time he has had the pleasure of working with leading companies on a global basis.
As a pricing strategist, Paul has developed a vast array of proprietary methodologies that go straight to the heart of the problem. He has helped clients with such pricing issues as: bundling/unbundling, competitive pricing, customer categorization, new-product pricing, perceived value, price complexity vs. simplification, pricing policy, price structure, price wars, price/volume relationship, and value-added pricing.

Naming your own price is not a new idea, but a number of businesses have experimented with this concept over the past few years with mixed results. While some wonder how an honor system generates enough income to make a living, others believe that success results from the visible nature of customer donations. According to dictionary.reference.com, an honor system is defined as, “a system of conduct in which participants are trusted not to take unfair advantage of others.” But experience shows that success is based more on value than honesty. Priceline.com was one of the pioneers of naming your own price for bargain-hunting travelers, but by 2005, “Priceline began to de-emphasize this system and added published price options on their Websites,” noted Wikipedia. In October, 2007, the British rock band, Radiohead, offered fans the option to pay what they wanted for a digital download of its new album, In Rainbows, direct from its Web site. Many people subsequently downloaded the album for free, but the media hype resulted in the album topping both the UK and the US charts and boosted ticket sales for the tour that followed. In 2010, Panera Bread became an example of a bricks and mortar business that adopted the honor system to see if it was a viable way of giving back to society. The result was an increase in revenue by 20 percent on the opening day. Not everyone is convinced of the success of the honor system; less well-known brands or products are unlikely to receive the same support. However, many agree that businesses benefit from the effects of the marketing campaign. Others like those in the movie and news industries don’t feel it would work for them as people like to be recognized as being those that give and there are too many ways that movies and news can be captured in private through the internet. Also, the honor system is unlikely to work for higher priced products. To create advantage from this trend, consider the following. Name your own price is a viable strategy if used correctly. Some products are just not meant for name your own price. Try the honor system of pricing for items less than $20. The honor system of pricing works best in public places. Lastly, use sharing and social interaction to boost honor system revenues.