A new pricing tactic - pay what you think it is worth
Monday, February 16, 2009
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A classic marketing combination in this news story - an unsual pricing tactic combined with widespread publicity = higher demand…
The FT (amongst others) reports on this eatery in Clerkenwell (London) where an unusual approach is being taken to pricing.
It sounds like the ultimate credit crunch-busting deal. The food price lists have been torn up for a month. Instead, customers are being asked to pay what they think the meal was worth. Interestingly, the average sale per meal went up on the first day of the tactic (aka publicity stunt).
According to the press release from the Little Bay restaurant (there’s a clue - they issued a press release!):
“It’s entirely up to each customer whether they give £100 or a penny. All I’m asking is they pay me what they think the food and service is worth,” said Peter Illich, who has run restaurants in London for more than 26 years…
It reminds me of the honesty box approach that was taken by a well-known supermarket when the till system failed. Shoppers were asked to estimate the value of goods in their trolleys and baskets, and the manager then took 20% off the estimate. The result was an increase in average sales per customer!
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