Pay-what-you-want for high-value priced services: Differences between potential, new, and repeat customers

This study contributes to the limited literature on the pricing method of pay-what-you-want (PWYW) in the context of a high-value service. The study evaluates the applicability and profitability of PWYW by comparing the minimum, maximum, and PWYW prices to traditional list prices of Europe's biggest dance festival (ImPulsTanz). Results from an analysis of secondary data from ImPulsTanz reveal a pricing structure mainly demographic-based. Survey results show that PWYW prices differ between three customer groups (potential, new, and repeat). Comparing potential, new, and repeat customers, the latter is willing to pay the highest prices. Despite all customers indicating their willingness to pay for the service, PWYW prices are lower than traditional list prices. Findings also confirm the existence of three segments of customers with diverse price consciousness and quality, and value perceptions. Implications for the pricing and promotion of high-value services using PWYW are offered.