Restaurateurs are always looking to tweak their menus to attain maximum revenue. Whether it be introducing new dishes or adapting new techniques to improve existing dishes to make it chic, dishes have to evolve over an extended period of time to entice the customers into spending their money. One of the myths of changing the menus deals with the pricing of the dishes on the menu. The high price points for dishes discouraging people into not ordering them is one mirred in false notions.
According to study conducted by Cornell University in 2014, there was a significant correlation between the prices paid for the dish and the enjoyment of said dish by the people paying for it. Participants for the study were offered a choice of several dishes as part of an Italian buffet. The price of the buffet was set at $4 for one group of participants and $8 for the other. The restaurant, dishes and the service were all the same for both groups. The findings from the research study noted that customers who paid $8 enjoyed the food 11% more than the customers who paid $4 for the same buffet. Researchers concluded that the pricing affects the way we assess the restaurant and food’s quality.
Targeting The Right Customer Base
Increasing prices of the menu leads to a customer base who are more than willing to spend money at your restaurant. The higher price point influences your customers into believing that the value of your food is significantly higher as compared to other restaurants who charge lower rates. The perceived value of your dishes increases which leads to a customer base with enough disposable income to spend it at your restaurant.
Paying higher prices makes your product ‘premium’. The higher price point creates a perceived premium value to your restaurant and the dishes your serve. There are many examples of restaurants creating an aura around their menu by charging high prices for their dishes, prime example being Starbucks.
Improve Customer Satisfaction By Charging More
As the Cornell research study shows, customers are more than willing to meet the high price point. If your prices are too low, your customers will perceive your product as being of low quality and the general thinking towards your restaurant becomes of one which caters to different segment of customers.
It is fairly obvious that the higher price points leads to better revenue for your restaurant, which in turn, helps in investing in better quality of food and better service personnel. It will greatly improve your customer’s experience. The better resources you have due to increased revenue, the better services you can provide to your customers.
These are several reasons why you should charge a bit more than your competitors. Although some might feel the prices to be exorbitant, the customer base you can build through charging premium prices will be well worth it.