Imagine paying only what you think your meal is worth. That is exactly what the Panera Bread Company is offering to patrons of its new Clayton, Missouri café. The idea, which is being tried in a small but growing number eateries around the U.S., seems to be an off shoot of the organic food movement. It’s also aligned with an expanding group of socially conscience entrepreneurs who subscribe to the belief that you can do well while doing good. It’s reported that most pay-what-you-want establishments share some of their proceeds or meals with local food banks or other charitable organizations. Charity is part of the business model and it’s also part of the marketing plan.
Conceptually I love it, but as a viable long-term business structure, I’m skeptical. Maybe I’m jaded, perhaps a bit cold, but I’ve observed human nature long enough to know there needs to be more “in it” for people over time. It all comes down to value drivers. Yes, there’s value in the gratification of charity and in the emotion of being part of a new social movement, but these alone aren’t enough to sustain a business. Why? Well for one thing, two-tiered charity arrangements with some skimming in the middle to cover costs create distrust, whether it’s warranted or not. Add to that a policy that allows people to anonymously pay for a badge of social consciousness and what you have is a magnet for deadbeats.
Having said this, I do believe there is a play here. It just may not be as altruistic as the scenario outlined above. Picture this: an upscale restaurant in a trendy part of New York, Chicago or Los Angeles. Add the element of scarcity through limited seating and perhaps the cachet of a celebrity chef or an exclusive brand name and we may finally be on to something. Oh, and the anonymous payment policy, that’s a non-starter.
No, I don’t propose posting what people pay on the restaurant’s website, but I do suggest that there be some overtly preferential treatment for customers who demonstrate their support (i.e. value) for the business. Payments can be easily tracked through a VIP card and positive reinforcement for good buying behavior can be delivered at minimal cost. Things like access to preferred reservation times, premium seating or a place on a Wall of Fame come to mind, but the list of perks in the “see and be seen” world of trendy restaurants is limited only by your imagination.
So how is my plan any more sustainable than the original model? I’m not 100% sure that it is. However, considering what people pay for luxury suites in sports venues and the sums doled-out at Christies’ auctions and political fundraisers, there is one thing I am certain of. There is a sizable market out there that has an insatiable appetite (and the resources required) to feed its need for esteem and self-satisfaction.
In the final analysis, there truly is no such thing as a free lunch.
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