There is a new kind of restaurant that’s opened here and it’s our topic this Foodie Friday. It’s called A Place at the Table and here is the concept as reported in the local newspaper:
A Place at the Table puts its mission at the counter, inviting patrons to pay what they can afford: the suggested donation, a little extra, pay for someone else’s meal or pay one’s way through volunteering. Volunteer jobs could include sweeping, wiping tables and bringing food to guests.
It’s not fancy and it’s only open for breakfast and lunch, which of course will have the effect of keeping the total bill down anyway. In my mind, that makes it less painful for those of us who can afford it to in essence overpay. It’s an interesting business model, don’t you think? Apparently, they’re doing pretty well as well as doing a lot of good. They’re not the only ones doing this, of course.
As far back as 2014, there were many of these restaurants in business around the world. Now you might think that most people would try to eat for free but the opposite is really true. Most people tend to pay at least the prices listed on the menu and many pay more. In addition, these businesses are often supplemented by grants, donations, and free labor to offset their costs.
The restaurant business isn’t the only one where the pay what you can model is in place. Music has become another one, with several artists releasing albums and asking the public to pay them what they think it’s worth although some folks distinguish between pay what you can and pay what you want. In my mind, anyone who is willing to offer their product up for judgment and to allow the user to asses the value is operating under the same model.
We see it in software and video games. It’s even expanding to fashion and amusement parks. So here is my question for you today. How much would your typical user pay you if they were setting the price? Is it enough to cover the cost of the product? Enough for you to make a profit? Or do they find less value in what it is your offering than you’re currently charging them? If you think the last response is closer to the truth, you had better look around because it won’t be long before a competitor figures that out as well and undercuts you. If you’re already competing on price and you’re still answering with the last response, you had better spend some time on figuring out how to add value so customers will gladly pay what you’re asking.