The Takeaway: Nobody Ever Wished They Paid Less

0:02Welcome to Full Comp, a show offering insight into the hospitality industry, featuring restaurateurs, thought leaders, and innovators served up on the house.

0:16Welcome to The Takeaway. I'm Josh Kopel. The Takeaway is a tool, one idea, one tactic, one strategy you can implement in your restaurant this week. There's no guests, no interview, just actionable information that'll help you make money without costing you a penny, all in less than a time that it would take you to count out a cash drawer. Here is this week's takeaway. My team and I read guest reviews by the tens of thousands. And believe it or not, I wish I had paid less has never appeared. Not once, not in one review, not in any city, not at any price point. You know what guests actually write?

0:56It was too expensive. And those things might sound the same, but they're definitely not. I wish I had paid less is about your price. It was too expensive is about your value. It means that the check that they received didn't match the experience. And you can't fix that by charging less. Here's what I think is really happening in your restaurant today. And we'll illustrate it through a guy named Dave. So when we look at your restaurant and we look at the way that you're operating today, you probably know that that burger should be$18, not$16. And you've probably known it for about a year now based on the increasing cost of labor and the increasing cost of goods.

1:36But you won't touch it. And you won't because somewhere in your head, there's this guy named Dave. He comes in all the time. And Dave is going to notice. Dave is going to say something. And it's going to be like a whole thing. So here's what I did in my own business instead of guessing and worrying about Dave. In my fried chicken concept, we had a digital menu board. And what I figured out was like changing the price of something, it cost me absolutely nothing to do. So I adjusted the price of one item every single week for six weeks. And I braced for impact. I was ready for the revolt, for that nasty Yelp review, for the confrontation at the counter.

2:13And in six weeks, there wasn't one comment, not from a regular, not from a stranger, not even from my own staff who had intel I was going to adjust the price. As it turns out, this guy I was afraid of, Dave, he wasn't watching. Nobody was watching. The item that you're terrified to touch is a monument to something that only you can see. And these are two rules that you can test to validate my point. I believe that$16 and$18 are the same number in the guest head. I think so are 12 and 14. I also believe that 19 and 21 are two completely different numbers. There are these pricing bands that we have to respect, right?

2:52And so what I want to do is make sure that you guys aren't breaking the bands as you incrementally adjust price. And you can move a dollar at a time until you feel this thing, or then you can back off by a dollar. But what you need to do is you need to find the ceiling. You need to become top of market. And the reason that you do is because if you are not top of market and someone else is, They are taking money that isn't providing you with any value. And why is that? It's because nobody chooses you because you're the second most expensive pizza place in town. That's how you think a guest thinks, but that's not how you think as a guest.

3:27And that's not how they actually think either. And so what I want us to do is I want us to start pricing strategically and not price out of fear and not be afraid of this guest that doesn't exist because the number was never really the problem. And so if you want to see what this could do for you, what I would recommend is that you don't change a single price. Just run the math. Pull your three highest volume items and add up how many of those you sell every year. And now multiply that total by a dollar or two dollars. Whatever you would feel comfortable with is a lift. And that's the annual raise you're leaving on the table with a single dollar.

4:02And so before you touch a thing, this gives you the opportunity to make an informed decision for yourself. And every week you don't run this experiment, you're paying for it anyway. And so the takeaway is this. Value is not what you pay. Value is what you get. So let's stop competing on price and start competing on value. That's this week's takeaway. If it was useful, do this one thing before the day gets away from you. Go to restaurantbusinessschool.com to sign up for my free five-day restaurant marketing masterclass. It's a live workshop where in 40 minutes a day, I'll help you build out your AI marketing team to raise check averages, book more private events and corporate catering, and bring your best guests back more often without discounting and freebies.

4:50There are no ads, there's no additional expenses, and no additional work on your end. It's just my strategies, and the robots will do the work for you. And if that sounds like something your restaurant needs, sign up today at restaurantbusinessschool.com. Thank you.