Last night I went to grab some late night pizza with my friend Matt. (It was technically May 6th, so I no longer felt obligated to eat tacos.) There was no posted menu, so when we got the front of the line, I decided to ask about the price difference between a plain slice and a slice with toppings. I was told that both were $3.50, so I ordered a slice of sausage. Matt got a slice with pepperoni and mushroom, and he was also charged $3.50. The guy behind us got a slice with sausage and pepperoni; he was charged $5.00. If I could remember which pizza place we were at, I wouldn’t go back.
There’s a delicious pasta place on 22nd and 3rd called lamarca. There are two entrances: one into a cheese shop and one into a sit down restaurant. The first time I went, my group walked in and tried to figure out where we should be going. There was no menu in the cheese shop, so we decided on the restaurant. The food was great, but the pasta lunch ended up costing us each around $15, which was surprising since we had heard it was very inexpensive. Since then I’ve learned they have a 3 tiered pricing scheme:
- If you order form a waitress, it costs about $15 and you get a roll, a small side salad, a fancy bowl and a metal fork.
- If you order from the cheese shop and sit down in the restaurant, it costs about $8, but you get a different bowl and a plastic fork
- If you order to-go from the cheese shop, it costs about $7; no bowl, but you still get the fork
I’ve been back to lamarca because the food is great and affordable (now that I’m on the inside), but I never feel good about giving them my money. I’d go there a lot more often if they had been straightforward with their pricing the first time I went.
I hate when businesses don’t make pricing information available to their customers and then try to take advantage of the fact that their customers and uninformed. While these tactics do promote price discrimination and, therefore, short term profits, they are myopic and bad for business.
When Ben and I ran Wash-U-Wash, we prided ourselves on customer satisfaction. One year many of our customers gave us more pounds of laundry then they had paid for. While most customers never asked us about the status of their account, we were also irresponsible about reaching out to our customers when they went over. Contractually, we had the right to collect a significant amount of money; however, we felt that we weren’t transparent enough about account balances. We decided to inform the relevant customers that they had gone over their poundage, but that we would forgive the balance on their account. This proved to be a good decision as over 70% of our non graduating customer base returned the next year.
Being ambiguous about pricing is a great way to irritate and ultimately drive away your customer base.