Pay what you want restaurant

http://www.trendhunter.com/trends/pa...aurant-zebrano

Interesting concept. I remember some old threads about trying the pay-what-you-think-it's-worth model with information products (I even did a few myself with mixed results). I wonder how it will turn out for the owner of Zebrano!

I have a feeling that 'in person' creates a much stronger feeling of obligation and perceived social risk than a mail order or internet transaction.

Cheers,
Erik

I just heard of this concept as well

http://changingminds.org/explanation...ocity_norm.htm

[Dien Rice]

Originally Posted by Erik Lukas

http://www.trendhunter.com/trends/pa...aurant-zebrano

Interesting concept. I remember some old threads about trying the pay-what-you-think-it's-worth model with information products (I even did a few myself with mixed results). I wonder how it will turn out for the owner of Zebrano!

I have a feeling that 'in person' creates a much stronger feeling of obligation and perceived social risk than a mail order or internet transaction.

Hi Erik,

I agree with you. I think the "face to face" interaction makes it harder (psychologically) for people to try to "cheat"... They probably feel a social obligation to pay something decent. And if they don't, the staff knows that they paid ridiculously low... The customer would feel uncomfortable.

There's a chain of restaurants which are pay-what-you-want in my city! This might be one of the old threads/posts you remember... Check out this post...

http://www.sowpub.com/forum/showthread.php?p=12438

The chain is called "Lentil As Anything", and they serve vegetarian food. Since I wrote that post back in 2003, they've expanded from one restaurant to three! However, I believe they are organized more like a cooperative. So the staff aren't paid standard salaries, instead, I think they share in any profits. That probably helps their "survivability"...

That post I linked to also mentioned a restaurant I once read about, which was also "pay what you want", which I think was running in the 70s or so. Apparently it was quite successful. Unfortunately, I can't remember now where I read about that one...

Thanks Erik - this is a fascinating topic! It will be interesting to see how the London restaurant fares...

After reading your post, I hunted around and also found more pay-what-you-want restaurants mentioned here.... http://www.springwise.com/food_bever...t_restaurants/

By the way, here's another relevant post from the past - Rooster's experiment with "pay what you think it's worth" for his info-products...

http://www.sowpub.com/forum/showthread.php?p=12419

(Rooster - George Gee - passed away last year, though he made great contributions to this forum and others too...)

Thanks again Erik - fantastic post...

Best wishes,

Dien

A few other Takes & “Twists” on the idea...

Across Germany, wine bars, hotels, hairstylists, gourmet food shops and even some cinemas have taken up the "Pay Whatever You Want" slogan. ...
http://www.expatica.com/de/life_in/f...-Germany-.html

Would a 'pay-whatever-you-want' model work?
http://forum.affiliatebot.com/2007/w...nt-model-work/

Eat Crow or Wear It and Pay Whatever You Want?
http://www.care2.com/news/member/366318970/786441

Wachovia to stop "pay whatever you want" loans...
http://www.americablog.com/2008/07/w...-you-want.html

Digital music is worthless, pay what you want is the future...
http://www.squidoo.com/digitalmusicisworthless

Along the same lines...
Free! Why $0.00 Is the Future of Business
http://www.wired.com/techbiz/it/magazine/16-03/ff_free

And if you Think of it...

Tons of Web businesses and Specialty products like...
http://www.ccleaner.com/

With...
Over 165 million downloads!!!

Have been Using the “twistable” idea for years...
http://www.ccleaner.com/download

By the way Excellent and very useful software...

Someone should start interviewing a Good mix of businesses Using these type of Marketing Tactics...

And Turn it into a series of ebooks, Videos and Case Studies as it would make for a very interesting read...

Especially the Stats and Results...

Curious Minds Want to Know and will Pay Whatever You Want...

Phil

[Dien Rice]

Hi Erik and everyone,

I just came across a "pay what you want" magazine trial subscription offer... It's mentioned on direct response copywriter Ivan Levison's website... (Note that Levison did not create this promotion - he's just reporting it...)

Here's an explanation of the offer...
http://www.levison.com/march_2008.html

And here's the result...
http://www.levison.com/april_2008.html

In a nutshell, the trial offer was for Inc. magazine. Quoting from the first link above...

The outer envelope contains teaser copy that reads:

Pay-what-you-want subscription offer.

It’s true!

Inside the #10 envelope is the order form which says (in part)

/x/ YES! Please send me my FREE issue of Inc. to preview.
I understand that after I have received my preview copy, you
will send me an invoice that I can return with the PAYMENT
AMOUNT THAT I DECIDE.

The buck slip reads:

Too Good to Be True?

Not so. We are offering you this unheard-of opportunity to determine
your own subscription rate for 12 issues of Inc. because we believe that
after reviewing your FREE issue, you’ll find Inc. speaks directly to YOU
with a highly specialized understanding of the mindset, interests and information
needs of the entrepreneur. Act quickly. This offer is time-sensitive and
non-transferable.

How did it turn out? Quoting from the second link above...

I recently heard from Patrick Hainault at Mansueto Ventures (the publishers
of Inc.) who came up with the promotion. As he said he would, Patrick
filled me in on the results which I'm passing along to you right now.

Patrick wrote:

"Results aren't final but the "pay what you wish"package will likely garner
less than 40% of the response we've received for the control against which
it was measured...."

So, this test with "pay what you want" didn't work out. But it's interesting to read about - and it's true, you should test, test, test....

(See the full story at the above two links!)

Best wishes

Dien

Over the last 30 yrs I've seen variations of this concept as a "Marketing Tool" HOWEVER....the restaurants or other "sellers" I've seen, who have have tried it....gave it up as a "bad idea".

The businesses that tried this were HOPING (greedily) that (MANY) of their customers, clients or even patients...would pay MORE than they should because they (the diners or customers or clients, etc),,,were MORE THAN HAPPY TO DO SO!

HOWEVER!....These business owners always forget to take into consideration ONE THING;

"THE SELFISHNESS OF CONSUMERS...NOWADAYS!"

The overall thinking, from ANYONE in the so-called, "Free-World"...nowadays (July 2008) is...."EVERY MAN FOR HIMSELF! Who gives a poop about others, I live for ME, MYSELF and I!"

If you don't think this is true...go into any Dept Store parking lot and see how many shopping carts have been left for others to stumble over...look at the amount of garbage that is on the side of the highway you are traveling on.

The Truth is....people in the good ole USofA (and all other countries) have ONE THOUGHT on their mind!

"ME!, MYSELF! and I!"

People everywhere are NOT thinking about anyone other than themselves!

Now...to continue along with the premise of your initial comment;
Regarding "Consumers or Customers or Clients or Patients" given the CHOICE of WHAT to pay for a service or product...it will NOT work to the benefit of the business or professional or whomever, offering it!

HOWEVER....I have noticed, in my LOOOONG career as a salesman and marketer of products and services....a few restaurants and other businesses, especially restaurants....that offer a FLAT FEE!

The first time I witnessed a "Flat Fee" restaurant was in Ft Lauderdale, FL during my college days during Spring Break back in the late 60's .

I was told by many people that I HAD to go to "X" restaurant. So, me and my buddies went one night and found a HUGE LINE...stretching anout 1 city block to this restaurant.

We got in line and after getting info from others in our line that THIS PLACE had...
ONE choice of Vodka (the best)
ONE choice of...whatever you wanted to drink and
THREE choices of Dinner...a steak, fish or chicken entre

ALL for ONE PRICE!

I wish I could remember the name of the place. They were still operating back in 1985 when I last ate their...but I can't remember the Name.

Anyway..."giving your customers the CHOICE of what to pay" has never worked BUT...offering One Price for "excellent products" has always worked.

Thanks for letting me expound...

Don Alm
http://www.midasreports.com/stoprefundscold
A Way to cut refunds to.

Very cool, Dien!

I'm disappointed not to see this model work more. Something inherently appealing about running a business like this IMO But can't ignore reality.

Any ideas besides Don's great one price restaurant example about how to maybe make it work better?

My thoughts are a little along the lines of:

Close personal contact with each customer so they feel an inescapable, unavoidable bond (I say inescapable only because we're talking about the paying aspects)/ combine this with payments not being anonymous in any way. You aren't publicizing them but say if I was a customer I might have the feeling that you as the owner knew precisely if and what I paid.

Use negotiating tactic of starting WAY high - claim extreme value way above what you hope your average price will end up being. Don't like this very much in either negotiation or this example.

Plan for it simply to be an easy to swallow way for someone to start a relationship. Look at it as a prospecting filter and net. Get people interested and offer more and more enticing products or services (always a good 'strategy')

Cheers,
Erik

Hey Don -

The flat fee restaurants are a GREAT example of making something close to this work in the "real world"

Thanks for sharing it with all of us!

(Hope things are well in your neck of the woods. I look forward to learning from your always insightful contributions to the forum.)

Best wishes,
Erik

Hot off the Press...

Another Fresh idea Applicable to many other business ideas and possibilities...
http://www.springwise.com/tourism_tr...urism_free_to/

Along the same lines...
Free! Why $0.00 Is the Future of Business
http://www.wired.com/techbiz/it/magazine/16-03/ff_free

It's only up to your Imagination of what Free! can Be...

Phil