Price = Value

There is a new coffee spot in my town called Terra Bites... with one very unique feature: no posted prices. You pay as much or as little as you like into a small, metal box.

I've talked to the manager, who figures they make about 80 cents on the dollar (of say, Starbucks prices).

Does this type of pricing policy make sense? Are people good at "valuing" the goods they consume?

And, would this kind of pricing approach work in the service business? Could a hotel ask that you pay whatever the stay was worth to you? Or, could a consulting company ask that you pay for the perceived value of their services? How would that change the way these businesses provide service to the customer? I think it would result in an even more intense customer-focus and more relevant results.