Most of the focus of FairPay is on a balanced use, as a repeated game in which the buyer has full power to set the price after each cycle of experience, but the seller maintains equal power over the pricing relationship by continuing the game to offer ongoing experiences only if they judge pricing to be sufficiently fair (referred to below as Full FP (Revenue-Gated) Mode). The criteria for fairness can be as strict or lenient as the seller wishes.
However, there are important use cases where a more purely voluntary payment regime is desired permanently, such as for public service journalism and many non-profit services. For example many membership-oriented journalism services are happy to make membership payments purely voluntary, and still provide access to their journalism to those who choose not to pay. A simplified variation on FairPay supports such a Voluntary Payment Mode -- described below as Real-Payment Survey Mode. This uses much the same process as full FairPay, but simplifies the seller controls to apply soft nudging to personalized suggested contribution levels, still based on individual value factors, but using only carrots, and not the stick of withdrawing FairPay privileges.]
I have recently been working with a startup company that is working toward introducing FairPay pricing for their new service (details on that to follow). That collaboration has led me to some interesting ideas on how you can best phase FairPay in, to get some basic functions at low cost -- and to learn a great deal about your market, so you can better manage your investment and your risk -- and improve your business overall.
Whether for an entirely new business, or for a new pricing approach in an established business:
- key questions about FairPay are how hard is it to integrate with your pricing systems, and to what extent might it put revenue at risk?
- key benefits of FairPay are as a learning process, centered on dialog with your customers, about what they want from you, and how they value it.
(Note, this post deals with strategies for introducing FairPay in a gradually phased manner, and assumes a basic understanding of FairPay concepts -- see the sidebar, and other posts and the FairPay Web site for the basics.)
The idea is to use FP in a startup mode to provide ongoing on a “free trial” basis, while a new service is in a “provisional use” mode, and then, after that, to phase in use of the full FP feedback and control processes.
- This approach is especially suited to new lines of business where the value proposition may be uncertain or temporarily limited (such as beta tests, pilots, etc.). Limitations may be due to lack of system function or lack of critical mass network effects, such as those affecting content richness, community participation, etc.
- This provisional use of a subset of FP processes can be beneficial, even before full use of FP is pursued. This opportunity may be common to many startup businesses, or to new services within existing businesses. It can also be applied in existing businesses by taking services that had been in a standard service tier, and shifting them to a premium tier on a trial basis.