Faculty of Economics and Business Administration Publications Database

Sampling, discounts or pay-what-you-want: Two field experiments

Natter, Martin
Spann, Martin
Volume: 31
Number: 3
Pages: 327 - 334
ISSN-Print: 0167-8116
Link External Source: Online Version
Year: 2014
Keywords: Sampling, Free samples, Pay-what-you-want, Price discounts, Sales promotion

Free sampling and price discounts are important, popular promotional tools used to attract new customers by reducing their risk of trial. The authors investigate pay-what-you-want (PWYW) as an alternative promotional tool to free sampling and price discounts in two field experiments. The authors find significant differences in perceived promotional characteristics and relevant performance measures, such as trial and repeat purchases by new customers. The entertaining and innovative character of PWYW induces many people to try it. PWYW may yield a higher repeat purchase rate of new customers, and sellers using PWYW benefit from higher word-of-mouth behavior. Finally, PWYW yields the highest promotional revenues.