What story does your pricing tell about you and your business?

In the past, experts said if you wanted to position yourself as high quality or even luxury, you’d better price your product high.

Why? Because higher prices tell your potential customers your stuff is worth more. (Even if it really isn’t.)

Higher prices also tend to keep out the less-committed. If you’re a professional service provider, and you want your clients to actually take action on your advice, the best way to do that is to charge them an arm and a leg (according to the experts).

I’d say it’s true. The more skin someone has in the game, the less likely they are to drop the ball mid-play. And positive outcomes (as evidenced via testimonials and case studies) are the sign-posts we business owners use to prove how valuable we are to our next potential customer.

You may have heard stories of people who were struggling to make ends meet in their business, who raised their prices (or just stopped giving discounts) and in so-doing created incredible demand for what they were selling.

I know all this…and yet, I’ve found it hard to charge higher prices simply because I see how many people get left behind.

What about those who — with the right guidance and advice — could really make a difference in the world? (If they could just get some traction?)

And why — WHY? — are there people out there charging two or three times what something is really worth? Yes, the perception of a higher price = greater perception of value, but puh-lease!

I also happen to know that there are folks pricing things at a crazy level so that they afford to pay their affiliates 40-60% of every sale. Sometimes more.

Doesn’t it seem a little backwards that YOU should have to pay that kind of surcharge for the privilege of buying something that’s (usually) just a pre-recorded bunch of videos or audios?

It does to me.

I really don’t want to build my business that way.

So what do you do if you want to help those who truly want and need your assistance, but can’t afford it?

You get creative, of course.

I’ve tried all sorts of things: pay-what-you-can, pay-what-you-will/want, payment plans, scholarships…and most recently, pay-it-forward.

The pay-what-you-can/will/want experiments didn’t really work for me. Mostly because I talked about them as an option for those with very little cash.

Folks who took advantage of those options, often dropped out of long-term courses (not always, but most of the time). It’s my theory that’s because they’d not made a sufficient enough investment — either psychologically or economically — and so felt justified when “life happened” and it was no longer convenient to do the work.

Those who’ve made payments or been given scholarships (with strict guidelines for how they work) have been much more inclined to stick with the program — and so, see greater outcomes.

But now I’m trying a thing I’m calling “Pay-it-Forward” pricing.

I first heard about the Gift Economy from Facebook pal, Rhiannon Llewellyn of MatanoiaDigital.com.

She turned me on to this author, Charles Eisenstein and his book Sacred Economics.

That led me to discover Karma Kitchen.It’s a unique restaurant in Berkeley, CA that functions as a fabulous example of the Gift Economy: There are no prices on the menu and the check reads $0.00 with only this footnote: “Your meal was a gift from someone who came before you. To keep the chain of gifts alive, we invite you to pay it forward for those who dine after you.”

This may come as a surprise to you, but their model works. In fact, it’s so popular, that other locations have popped up around the globe, too.

Here’s a few short videos that explain some of the thinking behind the Gift Economy:

This kind of model speaks to me in a deep way and gives me hope that our society can figure out a better way.

I want to live in a world where doing business feels good. Where we all get our needs met with ease and without sleazy tactics like false scarcity or NLP mind games. 

Wouldn’t you love to do marketing and sales that weren’t ick-inducing?

The reality is my mortgage company only wants cash. (I bet yours is the same way.)

So if you and I have bills to pay, how do we navigate the fringes of this Gift Economy thing without causing ourselves to go bankrupt in the process?

I’m not sure, but I’m willing to find a way.

In the spirit of discovery and learning, I launched two Gift Economy experiments earlier this year. The first, is my Sunday Brunch project.

In just the last month, I’ve had a half-dozen gifts from participants. The lowest was $6. The highest was $100. If you average them, each gift was about $30. Definitely worth the time and effort (and joy) I get from curating the discussions we have.

The second experiment involves my Bloggers’ Mastermind group.

While I was deep in the middle of learning everything I could about the Gift Economy, a colleague of mine mentioned that she’d really love to take part in the group, but her cash flow was a little low. She asked me to let her know when the next round started so she could join us then.

I thought about it only a second, and then reached out to her with this message:

If you truly think this is something you’d find value in, I’d like to gift you a seat in the current group. The only thing I ask is that at the end, if you think it was worthwhile, you gift a seat to someone else when I offer it again. Think of it as a pay-it-forward kind of thing. But only if you feel it’s worthwhile. Absolutely no strings attached.

She accepted and was an enthusiastic participant throughout our six weeks together.

When we wrapped up, she gave me a glowing testimonial and sent me an amount equal to what I’d asked for on my sales page. She also hand-picked a colleague of hers to receive the gift and take the class.

It’s just one person, but so far, I count this as a promising model.

And now I’d like to try this again. Maybe with you?

I’ve got just two seats left in the upcoming sessions of Master the Art of Biz Blogging. I’d like to offer one of them to you, if you’re a good match.

Here’s what I’m looking for:

1. Someone who’s been blogging for a little bit. Perhaps you started your blog six months or more ago but you’ve never really gotten traction? Or you’re publishing regularly, but you’d like it to be more often? Maybe you know that if you could just improve your writing and storytelling skills, you’d get more readers, commenters and ultimately, more clients?

2. Someone who can afford to pay-it-forward six weeks from now. While there are no strings attached to this offer in terms of price — or even of whether you decide to give — I don’t want your desire to participate in this way to be solely about your budget. Yes, I realize that you might be applying for a spot because your cash flow is a little stagnant right now. But I’d want you to be in a position six to seven weeks from now where you could give a gift equal to what you felt it was worth — even if you had to make that gift over time. (You’d only pay-it-forward if you felt someone could truly benefit.)

3. Someone who is “on a mission.” It’s important to me that you succeed because when you change the world (even if it’s just a small slice of the world), I change the world, too. No, you don’t have to be a non-profit or a social enterprise to qualify. You just need to have a solid mission that speaks — in some small way — to creating positive change.

If you feel like you’re a match for this experiment, please email me ASAP. Include a short bit about how you think you fit the bill, as well as a link to your blog so I can see what you’ve been up to.

Giftivism: The practice of radically generous acts that change the world.

Would you like to help create more of that? Have you tried any of these strategies yourself? What questions come up for you as you think about how you might incorporate giftivsm into your pricing model?

Please share your thoughts in a comment below and let’s keep this idea rippling out.