Letting customers choose how much to pay spreads awareness, goodwill

Carl Sobocinski got really creative when thinking of marketing ideas in 2008, at the height of the recession. His Table 301 restaurant group in Greenville, S.C., was facing the same sales slide most upscale restaurants were at the time, and he was actually considering trimming shifts to control costs. His regulars were still loyal, but less so, and he knew he had to draw from new sources if he would keep his business thriving during a down time. By chance, he read about a restaurant in London that successfully drew new customers by inviting them to pay what they wanted for meals served on slow days, and he thought it might work at his places. His partners and employees had to be convinced to go along. "On the management side, the fear was they'd get someone who'd want to take advantage of the offer, leave a five dollar bill or nothing at all," said Sobocinski. "The wait staff was fearful they'd not get good tips. … Others just thought I was crazy, but I had more faith in people to do the right thing." Sobocinski pitched a trio of potential advantages: 1. customers who imagined Table 301 beyond their budgets could try it at a bargain rate; 2. goodwill gained by the effort would provide free word-of-mouth marketing; and 3. generating even modest sales was better than none at all. To make the program cost-effective, he had to spend nothing on marketing. An email blast sent to the restaurant group's customer database was essentially free, and an eventual a pre-event newspaper story helped even more. Customers only had to pay what they wanted for food, but beverages came at full price. (South Carolina’s liquor laws don’t allow booze to be given away.) Not knowing how many customers would take the offer, Sobocinski put a full crew at the ready. "We did not go with a skeleton crew; it was all hands on deck because we wanted the experience to be like it always is," said Sobocinski, who tried the event on a Wednesday. After their meals, customers received handwritten tickets with price totals for drinks, but without food totals. Of the 50 checks presented that night (130 total covers were served), 14 paid 100 percent or more of the menu price, 12 paid 50 percent or less, and the remainder paid somewhere in between. On a typical Wednesday night, sales averaged $5,500, but on this night, the pre-discount total was nearly $8,000. Sobocinski said he gave away about $1,600 in food for the evening, making the net number a near wash compared to normal. The money spent was about the cost of an ad in a newspaper, he said, but that the giveaway was much more impactful than that. “I got to give our food away instead, which is much better if you're a customer," he said. “They got to know what our food tastes like, what our restaurant looks like and how our service is. We spent a pretty modest amount of money to achieve that.” Better yet, 80 percent of guests who came that night were first-time customers. "Most were looking at the menu and saying, 'Wow, this is not as expensive as I'd been told,'" said Sobocinski, adding that servers also made good tips for the event. Will he do it again? “We will where it makes sense,” Sobocinski said. Coco Tran, owner of three vegetarian restaurants in Louisville, Ky., runs a similar promotion every Thanksgiving Eve at her Zen Garden eatery. A vegetarian herself, Tran said she’s found customers amenable to trying a vegetarian meal the day before America’s biggest meat-fest. “It gets people’s attention when we market it that way because they think it’s kind of funny,” said Tran. “And anything they pay is donated to a couple of local charities that work to help world hunger.” Well-liked by local media, the charming and soft-spoken Tran notifies bloggers and reporters of the event, and said she gets free coverage every year. “It does help my business, but helping others is more important to me,” she said. “That’s why I’m in business to begin with.” by Steve Coomes