Sunday, August 1, 2010

FairPay -- Why Would Anyone Pay If They Don't Have To?

The answer is simple: Buyers who do not pay will not get further offers.

This is the first question many people ask on hearing of FairPay -- given its core of Pay What You Want (PWYW) pricing. It is an important question, and a central feature of FairPay is the FairPay reputation feedback process that addresses that. With FairPay, there are consequences for not paying -- much as there are for getting a poor credit rating.

FairPay will generally be most useful in cases where there is an ongoing relationship between the buyer and one or more sellers. This might be for ongoing purchases of multiple items or services, or for ongoing subscription access, taking the form of a series of limited FairPay offers from the seller in response to a series of FairPay pricing actions by the buyer.

Sellers can be expected to limit the initial FairPay offers that they extend to new customers who lack established FairPay reputations. They might offer only items and quantities that might typically be free (much as with freemium pricing), so that their risk is small. Only after the buyer establishes a history of paying fairly will the seller continue to make FairPay offers for larger quantities or premium items. The benefits to the buyer of not paying will be limited and short-lived. The benefits of paying will continue and grow.

Sellers can be expected to make these consequences clear when they first extend an offer to sell on a FairPay basis. The product/service is not offered as "free," nor as simple PWYW, but as Fair PWYW, or perhaps better put as Pay What You Think Fair -- essentially on trial, on approval, and on evaluation. Sellers would make it clear that zero is "acceptable" (with regard to reputation and future consequences) only when that is arguably fair. Such cases of reasonable fairness in setting a zero price might include cases in which the buyer gives a reason why there is little or no realized value to the buyer (much as is often required for returns), or where only very low quantities are sampled (which might be conventionally understood as a buyer-directed form of free sampling).

This process may be clearest and work best for early uses of FairPay that are complementary to "freemium" offerings -- which combine limited access to free products/services with a "pay wall" that requires set price payments for more usage and/or premium items. As an alternative to the pay wall and its set prices, buyers may be invited to enter a "FairPay Zone" and permitted to stay there as long as they pay fairly, as depicted in this diagram:

See more FAQs, and further information on the FairPay Web site.

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