My Willingness to Pay for web services: $0

The concept of Willingness To Pay (WTP) is meant to convey what price a consumer is willing to pay to buy a product and still be left with a positive value. The idea of profit maximization is to price a product in such a way to extract every bit of value from the customer that they will be indifferent between choosing and not choosing the product.

I have not paid any for any of the web services I have been using. Search, blog, group collaboration, my own social network, surveys, documents, spreadsheets, etc.

Now when a new service that is marginally effective aims to charge me for using it, the choice is easy. Unfortunately the price of web services is now their marginal cost, $0 , not because it has to be priced at MC but because my reference price is $0.

Anyone who attempts to charge a non zero price without managing the customer reference price (that is improving it from $0) has a wrong business model. You cannot simply move from free to fee without first focusing on customer reference price.

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