Below is the transcript from my Week 13 video. You can find the original post here: Make Your Restaurant Customers Happier by Increasing your Prices
Hello and welcome to this week 30 minutes restaurant marketing, this week I will talk about a Cornell University Study, that tells that You Should Increase Your Restaurant Prices for Happier Customers.
The Study was made by Cornell University Food and Brand Lab and It was performed at an Italian buffet restaurant in New York.
The goal was to see how pricing affects customer taste. They created a customer experience survey, that evaluated food quality and the overall restaurant, in a nine point satisfaction scale.
The participants all with similar geographically, demographic and psychographic characteristics, were without knowing separated into two different groups to experience exactly the same Italian buffet menu, with same servers, at the same time of the day. The only difference was that the Cornell team informed the first group of participants that the cost of the buffet was 4 dollars, and the second group was informed that the buffet price was 8 dollars.
What happened is that the second group, the ones that were informed that the buffet price was 8 dollars, enjoyed their food 11% more than the first group who taught the buffet price was only 4 dollars.
And I believe that these results will happen again and again. This makes me think about wine, when you pick up a wine list and see 2 cabernet sauvignon one is 10 dollar and the other is 20 dollar, which one you believe it is better? Our perception of quality is extremely associated with pricing and branding.
I remember a study made in 2004 by the Baylor College of Medicine in Texas, they made a blind tasting of Coke and Pepsi. Before the blind tasting 75% of the group said that they preferred Coke over Pepsi but during the blind tasting most of them selected Pepsi.
So what should you take from this researches and bring to your restaurant?
Don’t undercharge! Charge a fair price and your customers will appreciate more your Chef hard work at the kitchen.
If your prices are low, your customers won’t expect much from your restaurant and they will think that your competitors that serve similar food at higher prices are better than you.
So if you charging low, bring that prices up and invest that extra profit margin in better service or marketing.
Thank you for watching, hope it helps, and if you want me to keep creating restaurant marketing videos please support by liking, commenting, or sharing below. Thanks and Cheers