Ange is sometimes agony aunt… but how would you respond?
The problem is, I feel like locals want my food to be cheaper. They walk up to my place, look at the menu, and then walk away. I noticed most other shops in the area sell their dishes for less than I do, but if I did that, I wouldn’t cover my costs. Customers who come from further away say my food is delicious, but they won’t ever be as regular as locals. So my question is, should I change my prices to suit the locals or keep them the way they are.
My instant and clear feeling when you wrote about needing to reduce your pricing was – don’t – it’s not the problem. The problem is never that your very high quality product is too expensive, but that you’re trying to attract the wrong audience.
But then I thought… hmmm that’s bullshit.
Yes, you want some people to walk away, because they aren’t the right customers. If you make the ‘cheap’ customer your only customer, you might sell more, but where will your money go? You will be paying them to eat your food.
But what if the cheap customer is one of your customers? Not because they’re CHEAP but because they don’t have a lot of money and so they need their ‘meals out’ to be nourishing AND affordable?
In the beginning at Wandering Cooks, I charged what I needed to charge to make the kitchens viable, but I wasn’t gaining traction. When I looked more closely at my customer, I realised that they were the ones I wanted in my kitchens and they couldn’t afford them.
And so I really DID need a cheaper option. And it worked, although it took much more than lots of customers to make it work. We had to entirely transform and focus on new customers – diners and drinkers. And that’s how we moved from being just a place where people make food for elsewhere to being a venue in our own right.
And that’s also how we managed to keep supporting the customers who couldn’t pay much- by taking on a new kind of customer that could fill in the gaps. Scraping back up to a cash flow that allows our business to be viable has been a lengthy and difficult process, and wouldn’t have been possible unless we’d found a new direction as well.
So based on my own experience and lots of reading, I think you have 2 options:
Option 1: Reduce your prices, reduce your quality, and compete on that level in a downward slope to the bottom. The business with the most resources wins.
Option 2: Provide new products that cost you heaps less to make, but without the down turn in quality, to attract the every day local consumer as well as the ones that come for your special, more expensive products. And either way, you’ll need to do a whole lot of things to make your customer see you are different from some quick cheap easy product maker churning out something that’s been made by a machine, not your hands. Your place needs to speak of this quality loud and clear. You need to give them ridiculous value, but that comes with the quality of your smile, and the feeling they get that they are buying something healthy and nourishing for their families. And doesn’t leave them with a greasy guilt hangover that makes them question their appetite and admonish themselves for choosing your food too many times this month.