Model of voluntary payment in conjunction with charity
In October 2007, the group Radiohead began selling a new album In Rainbows at a free price. Each customer could pay any amount - one hundred dollars, ten or nothing to pay - and download music for free. The new album headed the charts and only the first day sold 1.2 million copies, not counting pirated traffic . The amount of the average purchase was, according to various estimates , from $ 2.26 to $ 8, but in any case the group earned more money on it than on the previous album, which was distributed according to the classical scheme with a fixed price.
Since then, many other merchants have begun to experiment with the voluntary payment model and look for a way to increase its efficiency. Scientists from the University of California conducted a study and found the option of how to significantly increase the average amount of the check.
The experiment was conducted on a huge sample (113,000 people) in a large American amusement park. After the attraction, visitors were offered to buy their photo for a fixed amount of $ 12.95 - only 0.5% of the guests agreed to part with that amount.
When the free payment model was applied, the number of buyers increased to 8.4%, but the average purchase amount was only $ 0.92, which hardly covered the costs of printing and selling photos. Although the number of buyers was very large, but the profitability of the business remained minimal — perhaps, as in the case of Radiohead, this is not the best business model.
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Then the researchers decided to use a mixed method. They left the same voluntary payment model, but announced that half the amount would be transferred to charity. This dramatically changed the situation. Obviously, people found it inconvenient to buy photos for ridiculous amounts, and the average payment grew to as much as $ 5.33, while the number of buyers remained rather high: about 4.5%.
Interestingly, when using a fixed price of $ 12.95 with half listed for charity, the number of buyers remained at 0.57%. This is the scheme used by many companies in modern business. It turns out that it does not work. Even eBay statistics show that if the seller begins to transfer 10% of the revenue to charity, the number of buyers grows by only 2%.
In other words, the use of a “charitable” approach only works with voluntary payment at a price that the buyer himself sets (according to scientists, this is because people feel social responsibility more acutely when they see that the company clearly risks its financial position for charity). As a result, even after deducting half of the income, the company received more profit than from the sale at a fixed price. If such an approach were used in an amusement park, it could have received $ 600,000 more profit per season, not to mention tax breaks for charitable activities.
To make sure, the owners of the park checked the profitability of the souvenir shops and other outlets on the day of the action - it remained unchanged, that is, the additional profit did not come at the expense of other departments.
The article with the results of the study was published in the journal Science (DOI: 10.1126 / science.1186744).
Since then, many other merchants have begun to experiment with the voluntary payment model and look for a way to increase its efficiency. Scientists from the University of California conducted a study and found the option of how to significantly increase the average amount of the check.
The experiment was conducted on a huge sample (113,000 people) in a large American amusement park. After the attraction, visitors were offered to buy their photo for a fixed amount of $ 12.95 - only 0.5% of the guests agreed to part with that amount.
When the free payment model was applied, the number of buyers increased to 8.4%, but the average purchase amount was only $ 0.92, which hardly covered the costs of printing and selling photos. Although the number of buyers was very large, but the profitability of the business remained minimal — perhaps, as in the case of Radiohead, this is not the best business model.
')
Then the researchers decided to use a mixed method. They left the same voluntary payment model, but announced that half the amount would be transferred to charity. This dramatically changed the situation. Obviously, people found it inconvenient to buy photos for ridiculous amounts, and the average payment grew to as much as $ 5.33, while the number of buyers remained rather high: about 4.5%.
Interestingly, when using a fixed price of $ 12.95 with half listed for charity, the number of buyers remained at 0.57%. This is the scheme used by many companies in modern business. It turns out that it does not work. Even eBay statistics show that if the seller begins to transfer 10% of the revenue to charity, the number of buyers grows by only 2%.
In other words, the use of a “charitable” approach only works with voluntary payment at a price that the buyer himself sets (according to scientists, this is because people feel social responsibility more acutely when they see that the company clearly risks its financial position for charity). As a result, even after deducting half of the income, the company received more profit than from the sale at a fixed price. If such an approach were used in an amusement park, it could have received $ 600,000 more profit per season, not to mention tax breaks for charitable activities.
To make sure, the owners of the park checked the profitability of the souvenir shops and other outlets on the day of the action - it remained unchanged, that is, the additional profit did not come at the expense of other departments.
The article with the results of the study was published in the journal Science (DOI: 10.1126 / science.1186744).
Source: https://habr.com/ru/post/99826/
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