Typically the Today show's hyper-saccharine segments make me want to gag. The clip below, which is from this morning's show, doesn't do much to change that, but if you can get past the terrible guitar music it's worth watching. The piece is about a small family-run restaurant in Maine that has responded to the slow economy by letting customers choose what they want to pay for their meal. Here's how it works: customers select an item on the menu, and then tell their waitress how much they want to pay for it. The owner, who is also the chef, then makes a plate that she figures is worth the amount they want to cough up. Order a $5 oyster plate, and you're probably getting one oyster and a heap of slaw and fries. Order the $10 version, and you'll get more oysters. Simple...I think.
While I appreciate the owner's quick thinking in response to a down economy and fewer customers, can this really work? Off the top of my head I can't see any major problem with it, although the owner/chef better be really good at estimating portions, because prices charged in a restaurant are typically very specific because of the slim margins.
The owner says she hasn't taken a hit by allowing customers to negotiate their tab, and that those people who weren't coming in because they no longer could afford are back. But what do you think? Is this a functional business model?
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I think this is a great idea, it makes customers happy and makes them stand out from other restaurants. In a bad economy the businesses that last are the ones that are innovative and smart. This is both.
—Jess
18:07, June 6th, 2008
True enough, it's working for now. Will be interesting to see if this entrepreneur reverts back to her original, one-size-fits-all pricing once the economy turns up again.
Re: Threadless is a terrific business, if not just because their shirts are hysterical. The communist party, for instance:
—brittschaeffer
17:09, June 6th, 2008
While this isn't a perfect example of 'user innovation' - a term coined by Eric von Hippel (a Harvard graduate, entrepreneur, and former McKinsey consultant) - it does seem to follow the trend of more user/customer driven business models. This month's Entrepreneur Magazine had a very interesting article on Threadless (www.threadless.com) an innovative T-shirt company with no designers that has $30 million in sales and 30% profit margins - a good read that will get you thinking about new business angles.
—brentbutler
16:52, June 6th, 2008
It already worked. We're talking about it :-)
As for longevity, I think its a good idea for a small place. Lots of times I know portions are huge and I wish I could have 1/2. All you would need is a quick scale in the back to know what something is per ounce. Smart.
—bryanh
16:44, June 6th, 2008
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