A pricing scheme [benlehman]

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Nathan proposed this to me as a pricing scheme for Drifter's Escape. Sadly, I've already done a lot of selling of the books at the present price point, but it's worthwhile to think about for future endeavors.

The pricing scheme is as such:
Two paypal buttons. One $10 + SH, one $20 + SH. The $10 button is labeled "reduced rate for poor people." The $20 button is labeled "standard rate for middle class and wealthy people."

So, I'll ask you: What are your thoughts on this? Why? Would this excite you or turn you off? Which button would you pick and why?

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There are 36 comments on this entry. (Reply.)

I'm all for it. And I'd click the $20 one since I'm solidly middle class these days.

I think that's pretty awesome. Last year, at many points, I would have picked the poor people option (as, when you scrape for groceries, I figure you're poor). So far this year, I would pick middle class. Hopefully I can keep rolling with that.

It is a turn off for me, and I'm not sure why. I'm all for having multiple pricing options, but I find the labels you site as kinda rude and quite offputting. Not sure why. That said, I'd pay $20 these days, but if it was labeled like that I'd feel pissy about it.

If you have any further thoughts on the off-puttingness, I'd like to hear them.

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Sounds like a good idea to me.

I would prefer to think of it as a "reduced rate" and a "bonus rate", where the bonus rate came with, a wallpaper, or something. The extra trinket does not at all have to be worth $10 more. In fact, it should not. It's kind of like a pat on the head.

Just because I am middle class or whatnot, does not mean I like wasting money, or just paying more for stuff. Otherwise, what's the point of having more money, if the cost of everything scales up? The implication here is offputting.

Here's my line of thought.

I, and a lot of other people, have noticed that game books priced under $20 (possibly $19) sell a lot less than game books priced at $20 or over. My hunch is that book which are cheaper than $20 trigger some sort of "bargain" or "low quality" thing that turns people off.

Clearly, the smart thing to do is just price everything above $20: higher profit margin and more sales! Everyone wins.

But, particularly in terms of the book in question, I want to reach people for whom the difference between $13 (the present price) and $20 is significant and may make a difference in whether they can afford the book or not. These are people who are unemployed, underemployed, on food stamps, etc., and they constitute a large %age of my friends right now. The implication here isn't that every item should scale up, but that for *this book* it's important to reach people who serious issues.

So, the initial thought was, two price points. Let people choose how much to spend. But clearly that's alienating to certain groups of people (you and Serin and, I imagine, a lot of the FGS peeps I know.) So will do more brainstorming.

yrs--
--Ben

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Argh: People for whom money is a serious issue.

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That's the thing. You need to tell me why I am paying $10 more than someone else. Because otherwise I don't want to pay it.

If you say, "Pay $10 more to support the author and get X cool thing", that's one thing. Note how I am phrasing it - paying $10 MORE. That is how I (and many other people) am going to see it - $10 is the base price and $20 is the premium price.

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What if the price is listed at $20 with a "hardship rate: for people unemployed, under-employed, with medical debt, or on government assistance: $10" listed underneath?

yrs--
--Ben

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That's much better. I would feel guilty clicking on that bottom link if I were not in one of those categories, which is what you want.

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I think there's nothing wrong with the idea of "Let people choose how much to spend", but that's not the same as the implied "If you have more money, these Paypal buttons will judge you harshly if you choose the smaller one." They take the choice and turn it into an obligation, which can be off-putting if I just want to come buy a game. So if it was just "Here's a $10 button and a $20 button, pick whichever", or "Pay $20 if you want to support me more" or even "Pay $20 if you think the value in the game is there" would all Not have the off-put-ness. They make people feel good about the choice to pay more, instead of punished for having more money on hand.

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I know a bunch of small punk record labels that sell their stuff on a sliding scale. Like someone else mentioned, I'm not sure I'd like the specific labels, but if you stated the book's minimum and maximum price and explained your reasons for charging sliding scale (as most of them do), I would be pretty keen on it, and I would pay full price.

I agree on the labeling sounding "off" to me. I could see one as being the "standard rate" (10 dollars), while the other one allows me to pay extra for...something. Am I supporting the author? The artists for any drawings/pictures in the text? A charity connected to this transaction that is getting a percentage of the proceeds? I would personally want at least something of an explanation rather than, "Pay this because you can afford it." I want to know why, even if the answer is, "Because you will help me create more things as an artist."

Be well.

Huh. The intention isn't "pay more as money for me," but "The 'real price' is $20 and (self-identified) poor people get a discounted rate." Clearly that doesn't come across. Is that message more or less palatable to you?

yrs--
--Ben

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In that case, I'd suggest a paypal button for $20 and then a note that you are willing to work with people depending on their personal circumstances. Identifying the "real price" and then the "hardship rate" as you mention in a comment above would be more palatable, especially when you clearly describe the hardship rate. On the one hand I'd worry that with a $10 paypal button everyone would click that one because it's cheaper. On the other hand, if people are forced to e-mail and get into a dialogue about the price, they may be too embarrassed/intimidated to do it.

Not sure if that really helps, but there you go.

Be well.

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Yeah. Even though we're on foodstamps, I'd feel weird clicking that button. I mean, this is for hypothetical dude who does this, not for you: you already have a good idea of our financial issues because we're buds. But like, if Dude I Did Not Know did this? I would never click the $10 button, because I would feel weird about you getting my name from PayPal and knowing I'm poor, and not knowing anything else about me. There'd be some guy out there who only knows "Elizabeth is a chick who is poor and interested in reading about hobos."

I don't know if that makes sense.

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Whereas, I'd click the $10 button because I don't really give a damn whether my Paypal button is telling the truth or not; it costs me half as much, and that means like what, an extra two lattes? Sweet!

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The logic here is that, if I can get the same item at two different price points with equal amounts of effort, there is no reason I will choose the higher price point, and I'd find it insulting to my intelligence for a seller to believe I would.

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Are you saying "the existence of this is a turn-off" or "I would always pay the lower rate, regardless of my circumstances"?

The former means that the idea needs work, or discarding. I don't really care about the latter. Presumably there will be a share of liars and freeloaders.

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Both. Frankly, I find the very idea of having a 'hardship rate' for an obvious luxury product to be somewhere in the area between insulting and ridiculous.

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Small Beer Press (specifically Lady Churchill's Rosebud Wristlet) does a goofier version (http://smallbeerpress.com/shopping/subscriptions/) of this. Co-opting some of those labels might help with the offputtingness people have mentioned above.

That's a very good example.

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When I started going to ACUS, they had three ticket prices: standard, reduced rate for hardship cases, and increased rate for people to subsidize the hardship cases. I always paid the highest I could afford—usually the increased rate.

So, compared to just a page that says "Click here to buy this for $20"...

With the categories proposed in the original post, I'd still pay the full $20 but feel less inclined to buy the game. That's because of a subtext I read into the category names: "You should feel guilty for being non-poor" -- sometimes a constructive sentiment, I figure, but not so much when I am just buying a game from you over the Internet. (Oddly, the "poor" button also gives me a negative vibe, like it's saying "You should feel guilty for being poor" to anyone who clicks on it.)

With the alternative "standard"/"hardship" categories proposed in the comments, I'd pay the full $20 and feel more inclined to buy the game. Because I don't read any negative subtext into it, my reaction is more like, "Oh, hey, that Ben is a swell guy! I should encourage him with my money!"

-- Alex

I think it's worth it even if it is offputting to some people (which it will be.) The fact that people feel guilty about how much money they have whenever it's mentioned, and feel as though it shouldn't be phrased in terms of justice, speaks to the degree of injustice we're willing to ignore. I think the idea is fundamentally sound, and the price points appropriate. I would, however, advise against labelling the middle-class rate as "standard," and would suggest a word other than "poor." (See Vonnegut's Slaughterhouse Five rant about "America hates its poor": it's all true.) Otherwise, get up in Mammon's grill, Ben.

I think this depends on the goal you have. If Ben's goal is to have your product reach as wide an audience as possible, then he should absolutely worry about labels being offputting to potential customers.

I also do not agree with your interpretation, if it applies to my comments, but that is a separate argument I can take offboard as not to clutter Ben's LJ.

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It applies to lots of people's comments, but more to my imagined reaction of my basic working model of the capitalist psyche. Don't feel specially singled out, for better or worse.

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For what it's worth, totally on topic.

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I have no problem with "poor people" vs "middle class and wealthy people", but apparently some people do. I do like the idea of a hardship discount, though. It's like a teacher's discount, which I take advantage of quite often.

I like it.

Since some people think the wording needs work, try to find a way to accommodate that. You don't want to piss off customers. However, I like the intent and I think any wording changes need to preserve the intent.

One (probably bad, but neutral) way to phrase it (at least for Americans) would be:

Customers with 2009 AGI (line 4 Form 1040EZ, line 21 Form 1040A, line 37 Form 1040) > $35,000: $20
Customers with 2009 AGI (line 4 Form 1040EZ, line 21 Form 1040A, line 37 Form 1040) <= $35,000: $10

Customers with 2009 AGI (line 4 Form 1040EZ, line 21 Form 1040A, line 37 Form 1040) > $35,000: $20
Customers with 2009 AGI (line 4 Form 1040EZ, line 21 Form 1040A, line 37 Form 1040) <= $35,000: $10

See, now I want to see something marketed with this price distinction.

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Or label them as $10 for People Beholden to the Devil, and $20 for People Beholden to The Man.

The way you've phrased it is very offputting to me but I might buy a copy just because of that.

Books are good at offering different value propositions, from mass market paperbacks all the way up to lettered limited editions, and part of their sales story is how well they integrate into the stories people tell themselves about the kind of person they are, but I should be headed to Gamestorm instead of expanding on that idea in livejournal.

The higher price point would be more palatable if it either included an extra (signed, numbered, or some kind of extra, whatever), or was explicitly a "Pay double and I'll give one away free to someone who'll enjoy it."

Cory Doctorow posts all his books free on the Internet, but he also has a page set up where people can donate copies of Little Brother to schools and libraries by way of thanks.

"I like your work so much I want to share it with others" has a much higher appeal (to me, anyway) than "I feel guilty about doing well so I'm willing to pay extra for nothing." Others' milage may vary.

Also, you shouldn't feel that just because you've been selling them for $15 they're stuck at that price point forever. People who bought them for that (including me) must have felt it was worth it, so if you charge less or more in the future, that has no effect on their sunk costs.

I think there are plenty of people in the game who would qualify for the hardship rate and are still beholden to the man.

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And plenty of folk beholden to the Devil got the $20

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You could have a web quiz to determine price point with oblique questions and an obscure computaions. You could take it again and again till you get a cheap price if you want.

May