Question:
People are complaining about my prices being too high. I’m making a living but not a killing, and I’m even charging less than some of my competitors. What do I say to them?
– Owner, fast casual/BBQ
Answer:
There are some timeless complaints in the restaurant industry: Operators think expenses are too high, servers think tip-outs are too high, guests think prices are too high, and the cycle continues.
When guests complain about pricing, they typically lack a nuanced understanding of all the costs that go into an operation. They may know, for example, that they can buy a rib-eye for $7 at their grocery store. Why, then, would it cost much more than that at a restaurant? Of course, operators know the true cost of getting that steak to the guest, in an attractive environment, in a prime location, with a skilled team, with all of its associated costs.
When guests are complaining about pricing, they are really pointing out that they don’t see a good value proposition. A friend and Irish pub owner who heard one such complaint told me, “These same [guests] think nothing of spending $150 per person at [a fine-dining restaurant], but complain if my entrees cross the $20 mark.”
My advice when guests complain about pricing is to be transparent about the reason your menu is priced as it is, emphasizing the value you are offering. It is not some arbitrary attempt at a cash grab. Built into that price are not only food costs, but also labor costs, rent, taxes, insurance, maintenance and so on, as well as the less-tangible factor of hospitality. By explaining why your pricing is the way it is, and focusing on the quality you provide, you have an opportunity to build a relationship with the guest. Erica Hope, regional manager with Pizzeria Vetri, agrees, “I train my staff to use the complaint as an opportunity to tell the story of our quality ingredients and why our pizza may cost more than competitors: ‘Here—have you tried this mozzarella? It’s made specially for us.’” Guests, Hope says, pick up on the attention to detail and small touches that help them perceive value. “I make constant visible improvements to the decor. Little touches like succulents or repainting the bathroom. … Guests get it when things are improving and respond positively.” They sometimes just need a little extra help to see it.
I would suggest using the complaints as impetus to examine your pricing. Perhaps your prices truly are out of line with costs and competitors. Perhaps your guests are not perceiving value in other ways such as atmosphere or service—how can you help them see that? Or perhaps they are looking for comps, or just want to complain. As Hope suggests, train your entire team to help guests see the value of your offerings.
More on pricing complaints here.