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THINKING BUSINESS
a blog by Chris Barrow

Is Dropping Your Prices the Best Strategy to Attract Customers?



An email this week from the Michelin-guide recommended restaurant in which Annie and I enjoyed one of my numerous 70th birthday celebrations last year.


When visiting last Autumn, we "went for it" with the full 7-course tasting menu and top of the range wine flight.


Very few covers, intimate and with an exemplary service from all the team, notably the husband and wife owners, she the chef and he the sommelier.


The purpose of their email?


To tell me that they had had dropped their prices by around 25% across the board for the summer months.


How did it make me feel?


  • Business must be tough;

  • Will it dilute the profile of their customers?

  • Why did they think it was OK to charge me 32% more last year?


What I'm pondering is whether that's just me in a critical mood, or will others feel the same?


Rumour has it here in the North West that some restaurants are struggling to stay open.


Maybe the "marketing" distractions I mentioned in yesterday's blog are hitting all sectors.


Even so, it seems to me that dropping your prices is a risky strategy.


I'd rather they (and you) emailed to to talk about how they were going to add value for the same investment.


"Last year to you paid £x - this year you will still pay £x but you will get this much extra for your money."


A stronger message I suggest?


"Quality remains, long after price is forgotten."


The restaurant?


I'll not be rushing to book a table.



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