A Literary Life

By Kate Jonuska

For some businesses, the idea of letting the customers set their own prices for products and services might sound like a stretch. But leave it to the limber Colorado Springs Cambio Studios yoga studio to make the “pay what you can” business model work.

“We knew there was a demand for yoga and that people need it so much in the current economic situation,” says Cassandra Green, who owns Cambio along with siblings Amber and Austin Richman. The studio has been open since June, and thus far, none of the owners have had to dip into their own pockets to meet expenses, which in their minds means success.

“Obviously, it’s challenging because we’re trying to figure out how it’s going to work,” says Green. “But I feel exhilarated.  We hear a lot of really touching stories about how (students) wouldn’t be able to practice at a fee-structured studio.”

This donation-based model isn’t new. The band Radiohead used it when selling the online version of “In Rainbows” for whatever price fans saw fit. It’s the principle behind the nationally touted SAME (So All May Eat) Café in Denver, which has no set prices and a donation box instead of a cash register.

At Cambio, here’s how it works:  A suggested price of $7-$12 per class is posted — at the request of students, who felt a range was helpful — and an unmonitored donation box hangs on the wall. All the owners hold down other jobs, drawing no salaries for the moment.

“It’s sort of the idea that fundamentally underlies tipping, and it’s something we’ve seen for a long time in things like museums,” says Kristina Lybecker, an assistant professor of business and economics at Colorado College.

“From a business-model standpoint, it should be something that could work fairly well because you’re opening yourself up to customers that have different abilities to pay. You should be able to bring in a lot more people that way, opening your customer base.”

CLICK HERE to read the full text of this article, which published in the Sept. 1, 2009 Gazette Business section.