Make them ask

By: Mark Stiving

Date: 8 November 2012

Make them ask/blackboard menu{{}}Last week, I received an email from McCormick and Schmick’s Seafood restaurant offering a good price on a three-course tasting meal, no coupon needed. My wife and I like M&S, so we decided to take advantage of this deal.  We made reservations, showed up at the appropriate time, and were seated at a table.

We scoured the menu for the three-course meal special but couldn’t find it anywhere. Had I misread the email? When we asked the server, she left and returned with a separate menu.

They made us ask for the special deal. As a pricing guy, I loved it!

Here are two lessons in this story.

First, every discount should have an objective. In this case M&S sent the email with low pricing to attract customers to their restaurant. Of course they would prefer people come and buy off the regular priced menu, but they wanted to attract additional customers with a price deal. They were willing to accept lower margins for these incremental customers.

Second, don’t give your best prices to customers who don’t “deserve” them. M&S diners who came in without knowing about the deal expected to pay regular prices, so there was no reason to give them the special deal. Asking for the discount is how you proved you deserved it.

Know why you are discounting

How about your business? When you offer a discount on something, do you know exactly what you hope to accomplish? Besides attracting new customers, you may be trying to influence their choice of products, or you may be trying to increase consumption. Just know why you’re offering the discount.

Once you know why you’re discounting you can determine who should get the lower prices. You want the best prices to go to the right people, but not to everybody. Find ways to target your discounts.

As a final thought, when I had to ask for the special menu I was surprised. The uniqueness of the experience is what grabbed my attention. However, if you think about it, this is really very similar to requiring a coupon, only without the coupon. Pretty interesting. You may want to add this tactic to your grab bag of pricing ideas for attracting new customers.

Mark Stiving is a pricing strategist, runs Pragmatic Pricing, and is the author of Impact Pricing: Your Blueprint for Driving Profits.