Pay What it's worth Restaurant

M-wav · 06-11-2012 2:20pm #1

I own a wine bar/tapas restaurant and keen on a new direction so Bear with me on this one.

We all know the "pay as you please" cafes/restaurants that have been popping up around the world. Some are doing well but most fail in a year.

It seems different places take different angels but none seem to be feasible in relation to a good business model.

I have been playing around with a few ideas and came up with "pay what it's worth" where the emphasis is on the quality of service and food you get. This puts the onus on the "restaurant" to have very high standards on all levels as this would correlate to the amount people decide to pay at the end of the meal.

The main point I am making is very positive. As a customer you want value, quality and an overall good experience. With the pay what its worth model the customer will only pay what they think their overall experience of the restaurant has been including food, service atmosphere etc keeping the restaurant on their toes.

This can give a very good public image to the restaurant as people will see the premises as having high standards due to the need to make the customer happy on all levels of service.

The biggest issue here would be people exploiting but i have figured out a few measures that would cut this out.

You need to book restaurant in advance (no walk in's)
-This makes it a formal meal with your name taken and when you leave you can see what people fealt the meal was worth. The more honest the customers are the better for the restaurant and the customer knows this. Walk in's would account for the majority of people that would exploit. having a "need to book" policy would give a good image to the restaurant also.

Only set meals with recommend pricing as a marker/guide.
-This is necessary so people can see what standard you are aiming for. If the customer feels it was not quite worth the €60 euro then they will most likely pay around €40 or even less. At least the customer knows that you want them to be honest so they can see if the quality is good enough. This customer then would return again instead of ticking them off the list etc.

All staff on percentage of profits.
I think this would be a fantastic motivator. At the end of the evening the money is counted and divided in relation to work. Here the staff know that if they work really hard and try to do the best they can, then it should mean more money at the end of the night.

Chef/kitchen 35%
Waiting/front house 25%,
managemenet/owner 40%

Customers bring their own wine
- Its a cool thing to offer and it means the customer can be more generous with the contribution at end of evening. Some wine can be available to purchase for a reasonable price. I think having wine included in the set meal might mean less profits at ed of evening.

Some feedback and criticism would be great. I literally just worked this out this morning and its already giving me that tingly feeling:D

nice1franko · 06-11-2012 9:17pm

As a punter, I don't know if I'd like it. I'd be a tad anxious I was over or under paying!

The way you've described it though does sound good and makes the restaurant appear genuinely interested in putting it's best foot forward.

Maybe try it out for one night only and make a song and dance about it on your site/blog/fb/twtr/etc and see how it goes? The customer is the food critique or something like that... and you could make it a regular thing if it goes well.

M-wav · 07-11-2012 12:03pm

Thanks Franco,

I'm hoping the guide price might relieve the anxiety a small bit. Then customers can just pay that and know management definitely wont mind etc.

I am looking into a new premises in the city as i'm very rural at the moment and i would'nt get the bookings.

Nuttzz · 07-11-2012 12:48pm

How does it work if a customer seriously underpays

So for example I decide to go with myself and the missus and all I have in my pocket is €20 and that is all I plan to pay regardless of the service.

Markcheese · 07-11-2012 1:05pm

I suppose you'll always get one or two , but if you can get a bit of hype going it could be worth doing midweek or sunday night ... Are you a restaurant owner or chef at the moment ? As in you know your costs -margins-price points...and hopefully the cost and value of a city location..
Good luck...

TheBody · 07-11-2012 1:12pm

Why don't you trial it for one/two nights per week for let's say a month and see how it goes? You could use it as an excuse to launch an advertising campaign and get your restaurant name out there if nothing else.

Good luck either way!!

Edit: Do we get a free dinner for the suggestions?

TheCostumeShop.ie: Ronan · 07-11-2012 1:24pm

Sorry in advance - Devils advocate side here.

I think the reason this is academically sounds and in reality is a nightmare can be traced back to the McDonalds principle. It's not that McDonalds makes the best burger in the world, that the service is faster or the ambiance is more comfortable. But there is a customer comfort that is unparallelled and undervalued. Customers can go nearly anywhere in the world and find one relatively close to them and it will be an extremely predictable experience. At no stage are they out of their comfort zone, they will have the same meal they always have - or if they feel guilty for going for the most unrisky food option, they could buy back a tiny bit of self respect with a twist on their burger with the latest offer of a different bread, poster picture or sauce etc.

On the other hand, your business model is all about pushing the customer out of their comfort zone. It's exciting for you but not so much for the customer. They are asked to grade your works monetary value, paying suggested price could be perceived as calling it average. What if the food is good but the service sucks because the waitress has decided she is betting on the men in the suits above the couple in T-shirts for the better wage - it might not be the case but the concentration and thought process is required. Even still rather than relaxing and enjoying themselves, you are delegating a job to the customer, asking their mind to focus on your job. The only people this would be attractive to is people who enjoy critising people - and that is what you would get.

The point about pre-booking - it's chicken before the egg stuff. If your not Gordon Ramsey your restaurant wont sell out before you open the doors. The college kids who are comparing it to a €5 college canteen dinner and the older couple who remember when a good stew was a £1 note will be in the door and comparing against their own metrics.

Personally i'd rather the big mac than spend an evening setting prices on a restaurants menu and paying for the privilege to do so. This might work as a promotional gimmick to get people to try the restaurant, people might like the idea - just like you do. They try the food, realise the working out of pricing is a uncomfortable strain, give up, actually spend the time with the person they went to dinner with and just pay the bill as normal. If you open with it as your USP though, in a recession, you'd be lucky to last the 12 months.

Ps. This is not meant to disuade you in any way from starting a business, I like that you are thinking outside the me too options.
Pps. I'm not a fan of McDonalds food personally, it's just a good example.

Tom_Cruise · 07-11-2012 1:28pm

Make the amount they pay invisible, to allow them to feel comfortable even if they decide to under pay ( otherwise you could name and shame them on the restaurants website lol )

john_cappa · 07-11-2012 1:35pm

In theory I love it but cant see it working sadly.

I would go and if the the food was good would pay well. So tired going to "normal" restaurants one or twice a week and ping 25-35 for 3 courses and not being blown away by the quality.

Would prefer to go twice a month and pay 50-60 a head and be counting the days till I go back!

Mellio · 07-11-2012 2:00pm

The way things are with money I think you will get a lot more chancers in trying to pay as little as possible for a decent meal good or bad.

There will be a good few genuine but as suggested could use many other reasons to pay a lower bill.

People might find it also uncomfortable deciding the correct amount for what they feelthe meal is worth, a lot of hassle for you, your staff and the customer to thrash it out.

If its not to be thrashed out then you might find yourself out of business very quickly.

Just throwing out idea's but Perhaps you could do the following:

Idea 1
If the restuarant has a minimum of 20 people in it offer 2 meals for €5, each person gets an envelope on arrival and at the end of the meal they open up and see if there the lucky person.

Its an incentive to get people in the door on the off chance they get a 3 course dinner for €5. Im sure you can incorporate the losses into the price of the other meals so you dont lose out to heavily.

Idea 2

If the restaurant is full can you price the meals down, so if there are 60 people in the restaurant can you price each meal seperately so first meal is €60, the next one €59 and so on down to a €1. the price is higher for some of the meals but a steal for the one with the €1 meal. again each person gets an envelope at the end of there meal and open it up to see what they have to pay.

Again just throwing idea's out so dont shoot me down, even the stupidest of suggestions turn into great ideas.

M-wav · 07-11-2012 2:07pm

Nuttzz wrote: »

How does it work if a customer seriously underpays

So for example I decide to go with myself and the missus and all I have in my pocket is €20 and that is all I plan to pay regardless of the service.

This is the biggest problem with the model but the results from lots of these "pay as you please" places show it balances out. Some pay €80, some play €40 etc etc. At the end of the day it should average out or even in favor depending on how satisfied the customer was.

I think it works out as 7 out of 10 people pay guide price or over from my analysis of pay as you please places and talking to a few owners.

M-wav · 07-11-2012 2:11pm

Markcheese wrote: »

I suppose you'll always get one or two , but if you can get a bit of hype going it could be worth doing midweek or sunday night ... Are you a restaurant owner or chef at the moment ? As in you know your costs -margins-price points...and hopefully the cost and value of a city location..
Good luck...

I am the owner but also in the Kitchen prepping food ( i have the skills

)

I am more interested in management and hiring an amazing chef.

With this concept it is all about the hype and the "uniqueness". I would invest a bit in local radio adverts and other media to create the hype needed to get the bookings. The customer reviews then will be what will show off the quality and standard of the premises.

M-wav · 07-11-2012 2:13pm

TheBody wrote: »

Why don't you trial it for one/two nights per week for let's say a month and see how it goes? You could use it as an excuse to launch an advertising campaign and get your restaurant name out there if nothing else.

Good luck either way!!

Edit: Do we get a free dinner for the suggestions?

I need to open a new premises anyway as i have exhausted my advertising ideas for this town/location. I need to move to a city for the above idea to work.

About the free dinner: sure you just don't have to pay

nice1franko · 07-11-2012 2:15pm

You'd have to reserve the right to refuse repeat bookings from people who have been "disappointed" with the food previously... or else you could have a dining room full of wagons like this: http://www.youtube.com/watch?v=gKRNRz6VK_k :pac:

noreen. · 07-11-2012 2:29pm

I would be concerned about your strategy for avoiding exploitation. I am not 100% convinced that people who would eat a nice meal and walk out without paying have enough shame to care whether you have their name or not.

I agree with Ronans point about people using their own ideas about price. Having been through the celtic tiger, there are many people who think food and drink in general is overpriced and will think along the lines that "a coffee is mostly water so anything more than a euro is too much" etc.

I would also be afraid that as you become more well known people who would take advantage would seek you out.

Sorry for being negative about this idea but it's great that your current business is going well and you want to expand. Would you consider a new branch of that?

TheCostumeShop.ie: Ronan · 07-11-2012 2:53pm

Mellio wrote: »

Idea 1
If the restuarant has a minimum of 20 people in it offer 2 meals for €5, each person gets an envelope on arrival and at the end of the meal they open up and see if there the lucky person.

Its an incentive to get people in the door on the off chance they get a 3 course dinner for €5. Im sure you can incorporate the losses into the price of the other meals so you dont lose out to heavily.

Devils advocate side - majority of customers leave feeling like they "lost". Not ideal.

Mellio wrote: »

Idea 2

If the restaurant is full can you price the meals down, so if there are 60 people in the restaurant can you price each meal seperately so first meal is €60, the next one €59 and so on down to a €1. the price is higher for some of the meals but a steal for the one with the €1 meal. again each person gets an envelope at the end of there meal and open it up to see what they have to pay.

Again just throwing idea's out so dont shoot me down, even the stupidest of suggestions turn into great ideas.

Devils advocate side - Restaurants make money by turning tables quickly. This would encourage an "arrive late" culture to get the best meal. People who arrive in early would feel they we're ripped off and subsidizing others meals.

Keep the idea's coming

. Now other people's time to shoot down one of my idea's so we are all on a level playing field.

How about if you sent every customer home with a little present in a nice box - and changed it every week. Something small like a desert, green tea, mini bottle of wine etc and a hand written thank you card with a voucher saying if they come back within 3 weeks (statistically unlikely to happen otherwise), then you'd like to pay for their wine or main course etc as you enjoyed having them as your guest and would love to see them again.

M-wav · 07-11-2012 3:03pm

TheCostumeShop.ie: Ronan wrote: »

Sorry in advance - Devils advocate side here.

I think the reason this is academically sounds and in reality is a nightmare can be traced back to the McDonalds principle. It's not that McDonalds makes the best burger in the world, that the service is faster or the ambiance is more comfortable. But there is a customer comfort that is unparallelled and undervalued. Customers can go nearly anywhere in the world and find one relatively close to them and it will be an extremely predictable experience. At no stage are they out of their comfort zone, they will have the same meal they always have - or if they feel guilty for going for the most unrisky food option, they could buy back a tiny bit of self respect with a twist on their burger with the latest offer of a different bread, poster picture or sauce etc.

On the other hand, your business model is all about pushing the customer out of their comfort zone. It's exciting for you but not so much for the customer. They are asked to grade your works monetary value, paying suggested price could be perceived as calling it average. What if the food is good but the service sucks because the waitress has decided she is betting on the men in the suits above the couple in T-shirts for the better wage - it might not be the case but the concentration and thought process is required. Even still rather than relaxing and enjoying themselves, you are delegating a job to the customer, asking their mind to focus on your job. The only people this would be attractive to is people who enjoy critising people - and that is what you would get.

The point about pre-booking - it's chicken before the egg stuff. If your not Gordon Ramsey your restaurant wont sell out before you open the doors. The college kids who are comparing it to a €5 college canteen dinner and the older couple who remember when a good stew was a £1 note will be in the door and comparing against their own metrics.

Personally i'd rather the big mac than spend an evening setting prices on a restaurants menu and paying for the privilege to do so. This might work as a promotional gimmick to get people to try the restaurant, people might like the idea - just like you do. They try the food, realise the working out of pricing is a uncomfortable strain, give up, actually spend the time with the person they went to dinner with and just pay the bill as normal. If you open with it as your USP though, in a recession, you'd be lucky to last the 12 months.

Ps. This is not meant to disuade you in any way from starting a business, I like that you are thinking outside the me too options.
Pps. I'm not a fan of McDonalds food personally, it's just a good example.

Thanks for your reply,

I think were seeing this in very different ways although i know exactly where your coming from with the Mcdonalds analogy.

People that want to go out for a meal look for key things like comfort, value, quality, privacy and basically just a nice overall experience.

In the above model the customer is treated like any customer in other restaurants. They get waited on, asked if they are enjoying their meal and thanked after they leave. They are not forced to constantly criticize their experience and trying to put a price on their meal. They will hopefully just sit down and enjoy a normal restaurant experience and at the end of the night they put their cash in a small (nicely decorated) box in the centre of the table. They then say thank you and leave.

The pay what its worth option is really just the uniqueness where the customer can then pay more or less depending on their experience.

I think the trick will be how well your create a ice environment in the restaurant.

nice1franko · 07-11-2012 3:13pm

Mellio wrote: »

Idea 1
If the restuarant has a minimum of 20 people in it offer 2 meals for €5, each person gets an envelope on arrival and at the end of the meal they open up and see if there the lucky person.

Its an incentive to get people in the door on the off chance they get a 3 course dinner for €5. Im sure you can incorporate the losses into the price of the other meals so you dont lose out to heavily.

Bon Appetite in Malahide did something similar to this (see here: http://www.onoffer.ie/forum/topic.aspx?contentid=14845). No idea how successful it was but they don't do it anymore (maybe they just cycle through offers to try to keep things fresh -they always run different kinds of promotions- or maybe they just found this one didn't get bums in the seats).

Anyway, I think the second part of Ronan's first post about having the reputation is, by far, the biggest problem you face.

I didn't realise it would be your whole USP with a brand new restaurant. I thought it might be a good idea as a promotion in an already established restaurant with a semi-regular customer base.

I'd be nervous opening a restaurant based on the idea alone.

M-wav · 07-11-2012 3:15pm

Mellio wrote: »

Idea 2

If the restaurant is full can you price the meals down, so if there are 60 people in the restaurant can you price each meal seperately so first meal is €60, the next one €59 and so on down to a €1. the price is higher for some of the meals but a steal for the one with the €1 meal. again each person gets an envelope at the end of there meal and open it up to see what they have to pay.

Again just throwing idea's out so dont shoot me down, even the stupidest of suggestions turn into great ideas.

Above is a seriously smart idea...its like group discounts etc. more people in the restaurant the cheaper it is for everyone;

Such as:

5 people eating - 20pp

10 people - €18pp

20 people - €15pp

€30 people - €12pp

You then make all profits on drinks from having a full house.

Mellio · 07-11-2012 4:14pm

TheCostumeShop.ie: Ronan wrote: »

Devils advocate side - majority of customers leave feeling like they "lost". Not ideal.

Devils advocate side - Restaurants make money by turning tables quickly. This would encourage an "arrive late" culture to get the best meal. People who arrive in early would feel they we're ripped off and subsidizing others meals.

Keep the idea's coming . Now other people's time to shoot down one of my idea's so we are all on a level playing field.

How about if you sent every customer home with a little present in a nice box - and changed it every week. Something small like a desert, green tea, mini bottle of wine etc and a hand written thank you card with a voucher saying if they come back within 3 weeks (statistically unlikely to happen otherwise), then you'd like to pay for their wine or main course etc as you enjoyed having them as your guest and would love to see them again.

It wouldnt mean that the first would pay the most expensive and the last the least expensive, the envelopes would be shuffled so no one would know exactly which price they would pay until the end of there meal.

If your happy going in knowing the max you can pay is €50 for a meal but the minimum could be as little as €10 then for me would be a good option, again the food has to live up to the €50 price tag also to ensure people dont feel agreived that the meal they just paid for was not worth the highest value and lose return custom.

This would also mean the OP could determine the pricing structure based on th number he/she has in on that evening so wouldnt shoot themself in the foot by offering a €10 meal with only 20 people in the price range would be higher.

As i said only suggestions but may be a novelty night more so to encourage new custom on quieter nights may be.

Mellio · 07-11-2012 4:20pm

nice1franko wrote: »

Bon Appetite in Malahide did something similar to this (see here: http://www.onoffer.ie/forum/topic.aspx?contentid=14845). No idea how successful it was but they don't do it anymore (maybe they just cycle through offers to try to keep things fresh -they always run different kinds of promotions- or maybe they just found this one didn't get bums in the seats).

Anyway, I think the second part of Ronan's first post about having the reputation is, by far, the biggest problem you face.

I didn't realise it would be your whole USP with a brand new restaurant. I thought it might be a good idea as a promotion in an already established restaurant with a semi-regular customer base.

I'd be nervous opening a restaurant based on the idea alone.

Not quite the same idea I was thinking of as the way they were doing it meant they were taking a 50/50 chance that they would have to cover the cost of the whole meal and make a loss but my idea is based on the number of people sitting would determine the pricing structure for that evening where everyone still pays but the more people you get in the more variable the price and a good few of your clients feel like they really got a nice meal at a good price.

(See my previous post for what Im trying to say):D

Dardania · 07-11-2012 4:25pm

I visited New York a few years ago, and discovered that I hate, passionately, the tipping culture. It makes me uncomfortable to be obliged to do a performance appraisal when I'm not in work. And I would never visit such a restaurant voluntarily here, despite valuing high quality food etc. as is your intent.

RATM · 07-11-2012 6:52pm

I think the idea could work OP but more so on a quiet Mon/Tues night than having it all week long.
As others have mentioned there will be people who have no shame underpaying for their food and you've got to be prepared for that.

Also you'd want to be sure the food is up to scratch in order for people to agree with paying what it is worth. For example if I'm eating out and see scampi on the menu there is a god chance I'll order it, despite it typically being one of the more expensive items. It ranges from €13 to €18 in most places. At those prices I am expecting to get scampi that is made in the kitchen fresh but recently I have paid €14 for scampi that I know was bought in Lidl because it tasted identical to what I buy to have at home.

So in an instance of that happening under your own business model I would be throwing you what I thought they were worth- about €1.50 and another few quid for service. Sounds harsh but if I order a €14 dish I expect something decent cooked start to finish by a professional chef. As soon as something like Bistro gravy makes it on the plate then what I feel it is worth is going to rocket downwards substantially.

The Dagda · 07-11-2012 7:35pm

I don't know if you know, but there's a PAYP restaurant in Killarney

http://www.irishexaminer.com/features/pay-as-you-please-policy-paying-off-for-restaurant-185544.html

I've eaten there, and thought it was great. It's kinda quirky, and they really use Social Media to drive it.

We asked the guys there about people not paying and he said it's the opposite, most people are very generous with the paying.

I wouldn't try and be clever and limit it to booking etc. if you're going to do it, do it properly. The majority of people are decent. Don't base your model on the cheap minority who may or may not visit your restaurant.

M-wav · 08-11-2012 11:02am

Dardania wrote: »

I visited New York a few years ago, and discovered that I hate, passionately, the tipping culture. It makes me uncomfortable to be obliged to do a performance appraisal when I'm not in work. And I would never visit such a restaurant voluntarily here, despite valuing high quality food etc. as is your intent.

Interesting you talk about tipping because in the pwiw model technically the tip is included. I can't see people tipping separate to what they eventually decide to pay at the end of the night. This is why i felt a percentage of profits should be divide among all staff as a motivator as the higher standard they give the better the generosity (maybe).

nice1franko · 08-11-2012 11:06am

May be of some interest to you, M-wav: http://lo.reddit.com/r/todayilearned/comments/12p3rd/til_jon_bon_jovi_has_a_restaurant_that_has_no/

Scortho · 08-11-2012 11:12am

Take a look at how Joe Macken got crack-bird up and running. It was only to be there for 90 days or so as a pop up restaurant. It was so successful that hes opened a large no. of different types of places, where you can eat good quality food at cheap enough prices.

What he did was a thing called tweet seats, where people tweeted a reservation. A limited no. of tweeters then got to eat there for free.

http://www.irishtimes.com/blogs/theindex/2011/02/19/crackbird-the-tweet-to-eat-temple-bar-pop-up-restaurant-thats-all-gone-on-the-credit-card/

Id be wary of pay as you eat, as you could get absolutely screwed with people not paying. Also it'd be kind of difficult to predict cash flow.
If you can serve good quality food at a reasonable price people will come.

M-wav · 08-11-2012 11:33am

RATM wrote: »

I think the idea could work OP but more so on a quiet Mon/Tues night than having it all week long.
As others have mentioned there will be people who have no shame underpaying for their food and you've got to be prepared for that.

Your probably right, although i still think a restaurant that just lets customers decide what they want to pay is a strong statement that the restaurant feel their food is top quality. You really are trusting people not to exploit but my research shows that it balances out or works out better.

RATM wrote: »

Also you'd want to be sure the food is up to scratch in order for people to agree with paying what it is worth. For example if I'm eating out and see scampi on the menu there is a god chance I'll order it, despite it typically being one of the more expensive items. It ranges from €13 to €18 in most places. At those prices I am expecting to get scampi that is made in the kitchen fresh but recently I have paid €14 for scampi that I know was bought in Lidl because it tasted identical to what I buy to have at home.

This is exactly the point. From the day you open you set your standard and never drop it but improve if possible. If the restaurant see's that people are paying below the guide price then of course there will be a need to change some items on the menu (or other chnages) but if all the changes lower the standard then you might as well close down

RATM wrote: »

So in an instance of that happening under your own business model I would be throwing you what I thought they were worth- about €1.50 and another few quid for service. Sounds harsh but if I order a €14 dish I expect something decent cooked start to finish by a professional chef. As soon as something like Bistro gravy makes it on the plate then what I feel it is worth is going to rocket downwards substantially.

I completely agree. My rationale is that people will perceive the place as having great food and happy they are given the option to pay what they feel their meal/experience was worth. No strings attached. You don't like it then pay a fiver and hopefully come back in a week and pay €20.

There will be a lot of psycho analysing your customers and tweaking the model at start but i think there is a sustainable model out of this rather than the PAYP places i have researched.

Sacksian · 08-11-2012 11:35am

M-wav wrote: »

Thanks for your reply,

I think were seeing this in very different ways although i know exactly where your coming from with the Mcdonalds analogy.

People that want to go out for a meal look for key things like comfort, value, quality, privacy and basically just a nice overall experience.

In the above model the customer is treated like any customer in other restaurants. They get waited on, asked if they are enjoying their meal and thanked after they leave. They are not forced to constantly criticize their experience and trying to put a price on their meal. They will hopefully just sit down and enjoy a normal restaurant experience and at the end of the night they put their cash in a small (nicely decorated) box in the centre of the table. They then say thank you and leave.

The pay what its worth option is really just the uniqueness where the customer can then pay more or less depending on their experience.

I think the trick will be how well your create a ice environment in the restaurant.

M-Wav - I think this is a really good idea and you sound like someone who is enthusiastic about restaurant and food culture. I don't think you need to overcomplicate things though. The pay-what-it's-worth will be a differentiator to interest people but, beyond that, restaurants live and die by the quality of their food, service and overall dining experience.

The pre-booking element is ample security for avoiding free-loaders looking for a cheap meal, and, if it's a genuine quality restaurant, the clientele will reflect that.

If you're passionate about food, then you're ahead of most people who run restaurants in this country. And if you're also thinking about the bottom line at this stage, you definitely have a chance.

My one piece of advice would be to define your target market and seek their opinions (not that getting advice from any source is of no value, of course!). If you want to create a dining experience, get the opinions of people who visit restaurants regularly, people who are prepared to pay for food and value food. And make sure there's enough of them to sustain your business. For example, I don't think this idea would work for a "greasy spoon".

I would definitely check out Pay As You Please in Killarney:
http://www.tripadvisor.ie/ShowUserReviews-g186612-d2097545-r122592102-Pay_As_You_Please-Killarney_County_Kerry.html

Interestingly, the reviews mention the lack of pressure to move on, etc. I presume your idea is not to compete with McDonalds. Good luck!

M-wav · 08-11-2012 11:40am

The Dagda wrote: »

I don't know if you know, but there's a PAYP restaurant in Killarney

http://www.irishexaminer.com/features/pay-as-you-please-policy-paying-off-for-restaurant-185544.html

I've eaten there, and thought it was great. It's kinda quirky, and they really use Social Media to drive it.

We asked the guys there about people not paying and he said it's the opposite, most people are very generous with the paying.

I wouldn't try and be clever and limit it to booking etc. if you're going to do it, do it properly. The majority of people are decent. Don't base your model on the cheap minority who may or may not visit your restaurant.

Yeah i'm from killarney myself and have been there a few times. Unfortunately it's not very sustainable in a small town like that.

I suppose what I am looking for is a business model that can make profit rather than break even or just get by.

Most payp can't survive in a city as you would get far more people wandering in for a free cup of soup etc.

If you aim for the higher end of the market with set meals costing €20+ and a few anti exploiting measures there is a possibility you could have a majority of very happy customers being generous on a daily basis.

I personally don't think there is a proper way to do it but just different target markets that would react differently to the choice they get to pay less than a guide price or more.

M-wav · 08-11-2012 11:45am

nice1franko wrote: »

May be of some interest to you, M-wav: http://lo.reddit.com/r/todayilearned/comments/12p3rd/til_jon_bon_jovi_has_a_restaurant_that_has_no/

I had come across that place actually. There is a few other places that say if you have no money put your name down and volunteer for an hour later in the kitchen.

I find it a bit of a turn off. The place seemed to agressively try and stop people exploiting. It needs to be subtle so the customer doesn't notice.

0ph0rce0 · 08-11-2012 11:49am

All I know is that yes people might pay, but in reality who will? if you think you can go in and eat for pretty much nothing. You Are Going To.

M-wav · 08-11-2012 12:01pm

Sacksian wrote: »

M-Wav - I think this is a really good idea and you sound like someone who is enthusiastic about restaurant and food culture. I don't think you need to overcomplicate things though. The pay-what-it's-worth will be a differentiator to interest people but, beyond that, restaurants live and die by the quality of their food, service and overall dining experience.

The pre-booking element is ample security for avoiding free-loaders looking for a cheap meal, and, if it's a genuine quality restaurant, the clientele will reflect that.

If you're passionate about food, then you're ahead of most people who run restaurants in this country. And if you're also thinking about the bottom line at this stage, you definitely have a chance.

My one piece of advice would be to define your target market and seek their opinions (not that getting advice from any source is of no value, of course!). If you want to create a dining experience, get the opinions of people who visit restaurants regularly, people who are prepared to pay for food and value food. And make sure there's enough of them to sustain your business. For example, I don't think this idea would work for a "greasy spoon".

I would definitely check out Pay As You Please in Killarney:
http://www.tripadvisor.ie/ShowUserReviews-g186612-d2097545-r122592102-Pay_As_You_Please-Killarney_County_Kerry.html

Interestingly, the reviews mention the lack of pressure to move on, etc. I presume your idea is not to compete with McDonalds. Good luck!

Everything you say I like:D

The Payp or pwiw has that novelty factor. Its a means to create some hype and interest on local radio and papers. It will also differentiate you from the other places on the street. The hype and interest created through the advertising and the push to get people to book in advance will be very powerful for the restaurants image also.

The restaurant will rely on constant advertising at the start but after a while the food will speak for itself. If profits are being made then there is no need to change the pricing model. If there are no profits then i'll just go back to standard pricing model.

If i walk down a street of 5 restaurants competing based on price ie. "2 course meal €23, 3 course meal €29, 2 course €25 with free desert etc" I think i would go into the only restaurant engaged in the price war. Maybe.

Very soon i'm going to do a lot of on the ground research talking to customers and try and get them to imagine dining in the proposed restaurant. This should give me more of a reality check but hopefully its a positive one.

BnB · 08-11-2012 5:30pm

I'd agree with a lot of what the CostumeShop chap said.

2 Points in particular

1) I would be concerned about the type of customers that you would be attracting. It would possibly be foodie types who I woudl be concerned would be higher maintainence.

2) Personally I wouldn't go there as a customer. I would just be uncomfortable. Am I paying too much, am I paying too little.... how much is this worth....? Even with the guide prices, I'd be wondering... Am I expected to pay more. Maybe to a foodie, they might see it as fun. But personally, I'd much rather, see a menu, eat my dinner and pay up. And if it's nice/good value etc.... come back again.

While I don't think it's a good idea as a full time model, I do think it woudl be good as a marketing ploy for a few nights to get publicity.

enricoh · 14-11-2012 8:15pm

a friend of mine in a reasonably affluent area had a charity car wash day- car wash was free, whatever u tip it goes to charity.
after an hour or 2 he changed back to the normal price n donated that instead. said he was amazed at the amount of people that gave nothing.
good luck with it if u do it, u'd need to be zen like, but personally i'd explode if the same family were in every week n giving me a fiver!

Pay What it's worth Restaurant

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