The Christian Science Monitor has an interesting story on Panera Bread’s initiative to create ‘pay what you can’ versions of their cafés that earn money and give back at the same time. The three ‘Panera Cares’ locations are a tiny fraction of the chain’s 1500 outlets, but they’re an intriguing experiment in community-focused pricing.
When requesting their food, customers are told a ‘suggested price’ for the order. Then they decide how much to pay. As it turns out, a majority of customers pay the suggested price. And the distribution of payment is rather compelling. According to the article:
Most patrons…drop the entire retail cost, or more, into the voluntary donation box, in essence subsidizing a meal for somewhat who can’t pay the full amount. Panera says about 60 percent leave the suggested amount; 20 percent leave more; and 20 percent leave less. The largest single payment so far? One person paid $500 for a meal.
Which goes to show that price is only partly associated with direct perceived value to the consumer. Arts organizations and other community oriented enterprises certainly bank on that truth to make their budgets work. But we tend to think of this payment in excess of price as a contribution, and treat it as a separate transaction (managed often by a separate department than marketing and sales).
The Panera experiment suggests there’s lots of room for discovery in deciding how we price our services, and how much we let our audiences determine the price.
Thanks BoingBoing, for the link.
Interesting catch, Andrew. You have a knack for finding “unrelated” ideas and offering them up to the arts.
It would be fascinating to see what “pay what you can” nights at theaters and orchestras usually average. These are marketed where I live as a way for the (usually) young and not so affluent to see otherwise expensive shows. They are typically on off-nights such as Tuesdays, so would likely be unsold otherwise.
On a prime night, my hunch is that the regular ticket price for the performing arts in the U.S. would vastly exceed what people would voluntarily pay. Panera’s sticker price is low to begin with. But such an exercise would demonstrate where a better price point might be, as we in the arts have been hurting ourselves with high prices for too long.
(Side note — the Philadelphia Orchestra’s price quadrupled (after inflation) from 1975-2010. Not good when you need the general public to save your hide.)
Bread and salami are easily replaced. A performance or work of art (not a CD or print) are each unique. For many the performance or exhibit is really all an artist may need or want. For others, that precious performance or artwork is their livelihood.