Why We Offer Sliding Scale Pricing
At The Mad Optimist, we want to create and model new and better ways of doing business. That’s why we’re one of the first online e-commerce sites with a sliding, “pay-what-you-can-afford” pricing model!
Behind the Scenes: Product Pricing
Pricing products has never been our favorite activity. We had to balance our need to cover costs and allow the business to grow and thrive with our natural desire to want to help our customers.
But when it came to pricing our new custom soap and bodycare offerings through our updated brand, The Mad Optimist? We were fired up! We had a clearer brand direction—and, with that, we had an even more intense focus on our values, too. We took the opportunity to revamp our pricing model and experiment with some truly innovative ideas.
“There HAS to Be a Better Way!”
Racking our brains, we brainstormed alternatives to the usual pricing models.
Since there isn’t another company offering custom, one-off bar soaps, we had no precedent to go by. (We would have to set our own precedent!) On one hand, customized products cost us more as a company to make. On the other hand, we wanted our products to be affordable no matter what!
We recalled certain customers we’ve served over the years. They told us they loved our products, but they couldn’t afford to buy them regularly. Like the low-income, elderly woman who had to avoid most soaps because they bothered her skin. Our all-natural soaps worked very well for her. So, how should we feel, likely pricing this woman—and many more like her—out of our products?
Then there are the customers who mentioned that they would happily pay much more for our soaps, because of the quality that we offer. What’s more, they wanted to go above and beyond to support what we were doing.
Mohammed A. talking with customers at a farmer’s market.
Rather than appeal to a single social class or income bracket, we’d prefer to cater to like-minded people—people for whom our values and our mission resonate.
Then it hit us.
We don’t have to choose—the customer can!
Enter the Sliding Price Scale!
Customers who can pay a bit more can directly help to offset the cost for customers who need to pay a bit less. At the same time, they’re also helping our business to grow. Best of all, together, we’re changing the way business is done.
How Does the Sliding Price Scale Work?
Simply slide the scale, and choose your price! ;-)
But, beyond that, there was a lot of thought put into it!
There is a lowest price. That’s the lowest price that we can offer on a per-item basis without likely harming the business. This includes covering the costs of our raw materials, labor, and estimated overhead for producing and running the business in general. This price point doesn’t really allow much for growing the business.
The “default price” is the price that loads on the page when you open a product page. This is the price that we would price our products at, if we had to stick with cosmetic/bodycare industry-standard pricing models. This is the price that would benefit our business the most, without what we would consider “overcharging.” As for the highest price on the scale? It is roughly as equidistant from the default price as is the lowest price.
How’s It Going So Far?
It’s going great so far! Since we launched TheMadOptimist.com in September 2018, we’ve found that of customers who purchase our bar soaps:
- -More than 67% of them choose a higher price than the lowest price option.
- -25% of them choose the default price.
- -Roughly 9% of them pay more than the default price. (Thank you!)
These numbers are very encouraging to us. They suggest that—at least for companies hoping to make the world a better place—a sliding-price scale model can work. :-D
Why Not Put Your Mad Optimism to Work?
So far, the sliding price scale has been a great example of what can happen when we re-think a social/business norm and replace it with a bold, alternative solution.