Pay As You Wish Pricing

This Element is an excerpt from Smart Pricing (ISBN: 9780131494183) by Jagmohan Raju and Z. John Zhang. Available in print and digital formats.

What your business can learn from Radiohead’s successful experiment with “pay as you wish” pricing.

On October 9, 2007, the English alternative rock band Radiohead began an experiment: Rather than price their music conventionally, they let their fans pay whatever they wanted to download their latest 10-song album, In Rainbows. At the inrainbows.com checkout page, visitors found an empty price box. When they clicked on it, a message said, “It’s up to you.”....