In Nice, a restaurant called Cocorico takes a bold step. Customers decide how much to pay for their meals. The menu shows no prices. At the end of the meal, diners choose the amount they believe is fair. This concept, known as pay-what-you-want (PWYW) pricing, challenges the very foundations of traditional pricing.

 

The idea feels risky, even reckless. Yet, the experiment highlights that pricing is not just about covering costs. It is about how customers perceive value and how much they trust the business. That is why this case should matter to executives and pricing teams beyond hospitality.

 

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The Concept of Pay What You Want Pricing in a Restaurant Business

 

Pay what you want pricing is not entirely new. It has been tried in music (Radiohead famously used it in 2007 to release their album In Rainbows), in cultural institutions such as museums, and in not-for-profit events. The idea is simple: shift the decision on price from the seller to the buyer.

 

Cocorico applies this concept in a pay what you want restaurant setting. All dishes are homemade, and no price tags appear on the menu. Diners decide at the end of the experience what the food is worth to them. The managers say the goal is to restore trust between the customer and the business.

 

This pay what you want business model appeals because it gives power back to the customer. It signals confidence from the business: “We believe in our value, and we trust you to recognise it.” While rare, this business pricing model shows how pricing can reshape customer perception of value and strengthen relationships.

 

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Why Pay What You Want Pricing Works in Certain Cases

 

Early results at Cocorico are promising. About 90% of diners pay honestly. Many even pay more than expected. Customer numbers are steady, and word of mouth is growing. These outcomes are not accidental. They come from three clear drivers.

 

First, trust matters. Customers often act fairly when they feel respected. In studies on pay what you want pricing, people value fairness as much as price itself. Cocorico taps into this human tendency.

 

Second, the value proposition is strong. The pay what you want restaurant offers homemade food and a distinctive story. Customers feel they are part of something different, which makes them more willing to reward it.

 

Third, social norms reinforce behaviour. Most people do not want to be seen as unfair. When trust and transparency are visible, customers act accordingly.

 

Together, these factors show that any business pricing model is not only about numbers. It is deeply connected to trust, perception, and customer perception of value. Businesses that ignore these drivers often miss hidden value.

 

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The Risks and Limits of the Pay What You Want Business Model

 

However, pay what you want pricing is far from a safe model. The biggest challenge is revenue unpredictability. If customers decide the price, forecasting income becomes almost impossible. This makes managing costs and margins extremely difficult, particularly for businesses with high fixed expenses.

 

Another risk is dependence on customer goodwill. Cocorico may succeed as a pay what you want restaurant in a tourist city with curious diners. But in tougher economic times, or in less engaged markets, many customers could underpay.

 

Finally, the model requires clear differentiation. If the product or service looks ordinary, customers may undervalue it. The pay what you want business model only works when the business offers something distinct that customers feel compelled to reward.

 

In other words, the success of pay what you want pricing is fragile and context-dependent. It is not a model most businesses should adopt. But it does underline a critical lesson: without strong pricing capability, businesses leave themselves exposed to risk.

 

pay what you want pricing

 

Should You Try a Pay What You Want or Other Flexible Model?

 

For most businesses, the answer is no. Pay what you want pricing works best when marginal costs are very low (such as digital goods), when the product is unique, and when customers are emotionally invested. Very few sectors meet these conditions.

 

However, the real question is not whether you should copy a pay what you want business model. Instead, it is what this experiment teaches about pricing. The key message is that pricing is strategic. It is not an afterthought or a number lifted from competitors. It requires capability, analysis, and investment.

 

Pay what you want pricing reminds us that customers do not just buy based on cost. They respond to trust, perception, and fairness. If businesses do not understand customer perception of value, they risk mispricing—whether too high or too low.

 

 

Lessons for Pricing Teams on Customer Perception of Value

 

Cocorico’s example of pay what you want pricing highlights the importance of experimentation and insight. Strong pricing capability means being able to:

 

  • Explore behavioural drivers. Customers respond to fairness, trust, and transparency. Teams need to measure these factors alongside traditional metrics.
  • Test and learn. Not every bold idea works. But controlled pilots, A/B testing, and customer research can reveal hidden value.
  • Measure long-term impact. Immediate revenue is only part of the story. The bigger question is how pricing affects loyalty, reputation, and customer perception of value.
  • Develop flexible models. A pay what you want business model is one extreme. But there are many ways to incorporate flexibility, such as value-based tiers, dynamic pricing, or bundling.

 

A strong pricing team combines financial analysis with behavioural insight.

 

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Lessons for Business Leaders on Building a Strong Business Pricing Model

 

Pay what you want pricing shows that pricing is not just a back-office function. It is a strategic lever for shaping trust, behaviour, and brand. Leaders who treat pricing as a cost-plus exercise limit their growth.

 

Supporting pricing means more than approving discounts or signing off on annual increases. It means investing in data, giving teams the resources to test and refine, and aligning pricing with the broader strategy. It also means redefining success. Instead of focusing only on margin recovery, leaders should also consider how pricing builds long-term value and strengthens customer perception of value.

 

Businesses that prioritise pricing capability gain an advantage. They are better placed to adapt to shifting markets, defend margins, and capture value with a stronger business pricing model.

 

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Conclusion and Call to Action on Pay What You Want Pricing

 

Cocorico’s pay what you want pricing experiment is not a model to copy blindly. But it sends a clear signal: pricing is not fixed, and customers respond to more than cost. Perception, trust, and fairness drive real value.

 

Make pricing a strategic priority. Equip your teams with the tools, data, and freedom they need. The challenge is to build capability, test new approaches, and link pricing more closely to customer perception of value.

 

Now is the time to rethink how your business pricing model works and what it says about your brand. If you want support in strengthening your pricing and organisational strategies, reach out to us. We can help you explore options, test ideas, and build approaches that protect margins while creating lasting customer trust.

 

For a comprehensive view of maximising growth in your company, Download a complimentary whitepaper on Future Proof Your Pricing Strategy.

 

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

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