I think the owners of the Indonesian Panggang stall at the NUS Engineering Canteen have put to practice some good business tips. How can one maximize profits? You may be charging your customers $3 now. But if your customers are happy to pay $4, why not ask them for $4? It’s very clever.
I was queuing at the stall today. They had a new special panggang dish. Ayam Penyet and Ikan Penyet, going for $4 and $4.50 respectively. It’s basically fried chicken and friend fish. I noticed quite a few people ordering the meal. Now, the usual meals at this stall go for just $3. This is like a 33% and 50% hike in prices, respectively.
What’s so different about it from the usual meals? The usual meals are served in a plate: rice, meat, a piece of omelette, and cucumbers. In this upgrade, you get the meet, tofu, cherry tomato, and cucumbers served on banana leaf in a basket. The rice is still in an ordinary plate. It has a pretty nice presentation.
The meat is not much different. It’s delicious, but the cost of it is probably about the same. Basically, you are paying 33% or 50% more for the tofu, cherry tomato, banana leaf and the basket.
This stall’s doing very well. They serve their customers pretty fast, so their queue moves really fast. That means they collect money very fast too. When you are doing so well, the next logical step is to collect more money very fast. That means charging more. Clever.
Businesses like this do not need loyalty cards. Loyalty cards work by getting customers to come back more often than they ordinarily would. For example, if a customer would ordinarily come in only once in two weeks, why not get him to come once or more times a week? In this case, this Indonesian Panggang stall already has enough customers coming in anyway, there is no need to get them to come in more often.
Well, it seems people in NUS are quite happy to pay $4 for canteen food.
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