Article at Forbes.com.
Article at Telegraaf.nl: De toekomst: Betaal-wat-je-wilt-principe (Dutch). Pay-what-you-want is the future according to marketing professional Egbert Jan van Bel. He thinks that 80 to 90 percent of the consumers are willing to pay a fair price.
An article in the Journal of Marketing (January 2009) shows that pay-what-you-want can lead to an increase in revenues.
See my earlier post: Pay What You Want!
* Pay-as-you-wish restaurants (Springwise – Nov. 13, 2007)
* Pay-what-you-like restaurant’s recipe to beat the crunch (London Evening Standard – Feb. 3rd, 2009)
* Pay what you want at ‘The Come Back’ (flandersnews.be, Aug. 3, 2009)
Recession Ride Taxi let’s customers pay what they want. From the article at The Burlington Free Press: “Nobody has shortchanged me yet,” he said Saturday. “Nobody’s stiffed me. I’ve decided to empower the customer; they like the fact they can decide.”
The message is “Trust the customer”. This reminded me of an article I read in the book “Discovered! 505 Odd Enterprises” by George W. Haylings. From the second, revised edition (1949):
Customers run cafe as they please
There’s an unusual cafe in the northwest where the customers wait on themselves. You’ll find them behind the counter slicing their own pie, ladling out their soup, drawing their coffee. They even make out their own checks and operate the cash register. When he couldn’t afford to pay high wages for help, the proprietor decided to turn his cafe over to his customers and let them run it as they pleased. He brews the coffee, supervises the cooking but leaves the job of dishing up the food to his customers.
While the customers handle the cash register and take out change, there is less dishonesty than you would imagine; moreover, according to the proprietor, the customers do not overload their plates. To quote him: “I find people are honest and I never worry. My customers are fine people and would not cheat me. They enjoy helping run the business.”
That this idea is workable is proven by the substantial profits the proprietor has realized and it [is] his conviction that other restaurant owners could operate as successfully. The plan obviously cuts down overhead expenses materially, and the idea has definite advertising value from the “serve yourself” angle.
By giving the customer credit for honesty the enterprising businessman is complimenting his prospective customer and his actual customer. Such a practice might make your business a success where it otherwise might have been a failure.
A Restaurant in an eastern city tested out this idea years ago and they’ve been using the plan ever since. They have also proved that this unorthodox way of doing business will bring success!
The customers in this Cafe are allowed to serve themselves from the display of food. No check is made of the amount taken or the kind. On the way out they pay the cashier for what they have actually eaten. Only the customer’s memory backed up by his own sense of honesty, guides him in figuring up the right total. Only a few of the customers try to cheat – less than one per cent – and the losses are so slight that the proprietor has never bothered to prosecute even those erring customers that he knows to be cheating!
This policy of trusting is so unusual in a world of questionable or mixed-up ethics that it is bound to attract attention in any community in which it is tried! Such attention leads to free advertising or word-of-mouth advertising – the best possible kind for any business!
Anything out of the ordinary will usually advertise a business. A San Francisco cafe, for example, originated a plan of their own whereby the customers may have a box of “Pet Pakits” if requested. These contain leftovers from patrons’ plates which may be taken home to their dogs and cats. Owners of dogs or cats will naturally remember this restaurant and recommend it to their friends. Just a little extra service like this makes the restaurant different from others. A business personality can be given to about any type of enterprise by adding little extra services of some kind that stand out.
Throughout the country you will find the majority of eating places all about the same all built and managed, nearly, after the same pattern. Here and there where the proprietor dares to be different, unusual or renders a better service or an extra service, the business stands out and is usually prosperous.
Set the price
Two brothers in the state of Washington asked their customers to set the price for the Cafe’s dinners. At that time this “set” price averaged $1.40 per meal and brought in a load of business. The dinner was actually a $1.25 value. O.P.A. would possibly have set it even lower or around 85¢. Here is additional proof that this sort of plan will work and that it continues to work for others willing to test out the idea.