Does honesty box pricing work?

honesty box

Honesty box pricing is an interesting concept that’s been tried and tested, with varying degrees of success.

In 2007 one of the biggest bands of the decade, Radiohead, decided that they would make their much anticipated album, In Rainbows, available to anyone to buy on a pay-what-you-like basis.   

In this FT.com article Radiohead’s frontman Thom Yorke explained that: “Yes, it probably would give us some perverse pleasure to say ‘Fuck you’ to this decaying business model”. By which he meant the music industry, which looked on aghast as one of the world’s biggest rock bands opted out of the record label system. Worse, Radiohead were offering fans the chance to pay whatever they chose to download new music.

As it turned out their honesty box policy was a bit of a financial disaster for them – a rumoured 62% of people didn’t pay anything to download the album.  But the political point was made and the path paved for other artists to adopt the independent principles eshewed by Radiohead. 

From the dizzy heights of rock to the leafy lanes of Cumbria honesty boxes rely on our inherent goodness to be successful.  A leisurely trip up the Lyth Valley will take you past farms with unmanned shops offering the famous damsons as well as eggs.  The honesty box often apologetically tucked to the side, confirming our idea of a rural idyll in action.

And then there is the story of the digital football magazine with an honesty box approach to payment – you can pay what you like (except the minimum payment is £5 and the suggested payment is £10). 

I have some sympathy with this pricing approach.  It’s easy enough to pay an honesty box for a cup of coffee, a newspaper or a second hand book but a digital magazine is slightly different and less well known a commodity.  Sometimes it’s nice to get a guide.

Principles of honesty box pricing

  1. customers will pay what they can afford
  2. customers will not take the p**s
  3. customers will pay what they think it’s worth
  4. customers won’t cheat someone else
  5. customers are mature and reasonable adults
  6. customers have a good nature that you can appeal to

Why does honesty box pricing work?

  1. customers feel trusted
  2. customers know what the rough value is
  3. we all want to believe in the goodness of others
  4. honesty box pricing makes us feel good about ourselves

When honesty box pricing might not work:

  1. when people are unsure what value to place on something – this takes too much thought 
  2. if people don’t feel any emotional connection to the seller then they won’t necessarily respect the honesty box principles

The principles behind honesty box pricing are something we’re experimenting with at Learning Pool at the moment. 

We’re holding our annual conference in September and have been told by some of our customers that they’d love to come but their council won’t sanction the cost. 

So we’ve created a number of free and reduced price places for these customers.

We’re very interested to see whether the councils who’ve told us they have no money will take the free places or and whether they’ll all be taken up by those who have money but are quicker off the block.

Early indications seem quite heartening.  Free places are being left although reduced places are going fast.  I’ll update in a few weeks time to let you know how things pan out.

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5 thoughts on “Does honesty box pricing work?”

  1. Great blog Janet. It encapsulates the honestly box principle perfectly whether that be in the music industry or Learning Pool’s Community Day.

    What I find most striking is your point about the emotional connection and if it isn’t there the honesty box will just simply not work. I believe Learning Pool’s community feels a sense of warmth and pride in what they do which hopefully should be reflected in the honesty box contributions. Time will tell.

    Looking forward to reading your next blog post.

  2. Thanks Lisa.

    I love the fact that the honesty box in the image I chose has three padlocks holding it down!

  3. Great blog post. Leanne from Creative Invites sent me over as we’re starting something similar on our own website RealWeddings.ie. Look forward to reading your updates!

    Fiona

  4. Hi Fiona,

    Thanks for reading my post. Good luck with your own honesty box pricing – let me know how you get on. Hope it works out for you – post back here with your updates.

    Janet

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