Twenty Years Tells Us: The price isn’t always the “price.” In other words, the cost of the product doesn’t reflect the value of what you’re providing. There are lots of other factors that go into the true value of your product including: the environment you provide, the expertise to craft the product and the quality of service. The menu price of the item should reflect these different aspects.
Setting a price for your product can be difficult. You want to give your customers the best price possible while also being fair to yourself and your employees. The ideal price reflects the quality of the product which includes the service provided by your well trained staff and the unique ambiance of your store.
To help you find the best prices for your store and customers, we’ve outlined a quick five point “how-to”:
1. Do not engage in a race to the bottom price
After evaluating your competition, you may notice that some are able to offer very low prices on their product. Although you may feel compelled to rush and change your menu, take a moment to consider other factors apart from price. Charge a fair and competitive price, because you are giving the customer what the competition cannot: quality, service and support.
2. Your Pricing Should Reflect the Quality You Serve
If you are serving up handcrafted, quality beverages then you are already ahead of the competition. Even the big chain cafés aren’t serving fresh coffee due to how they set up their supply chains. Your menu pricing should reflect the quality you serve and should be competitive, or maybe slightly higher than the coffeehouse chains.
3. Keep Your Ideal Customer in Mind
You want to consider your target audience; that is, your ideal customer. Trends suggest that lower prices may be perceived by consumers to indicate inferior products or cut-corners. For example, an underpriced cup of gourmet coffee might be overlooked by a customer looking to pay a bit more for a better product. Underpricing may cause undervaluing.
4. Take Calculated Risk
Take a leap of faith and see what happens. Examine factors such as average ticket price to see how your customers are spending and what products are most popular. Consider your competition, product quality and your target customer.
5. Be Confident and Ready to Answer Questions
If you haven’t changed your menu prices within the last year, it may be time to do so. Be confident in your decision, ready to answer questions about the changes and ready to continue offering better service than anyone else around. You may have some disgruntled customers, but overall your business will be healthier.