Pricing Meetings: The Expected and Unexpected
In my last blog, I promised the low-down on my recent restaurant pricing review meeting, and I'm here to make good on that promise. Having been through this exercise many times, I had a good sense of what to expect, but there were some new twists as well. What started out as a case of "the more things change, the more they stay the same" ended with some pleasant surprises.
Business as Usual
I often find that with franchisees and franchisors, having the same goals doesn't mean everything is harmonious. Franchisees have many ideas about what will work for the business, and they want everything to happen all at once. And the corporate folks can only prioritize so many initiatives and can't deliver everything at once. It can be frustrating for both sides.
Time is Not on Our Side
It never fails that time is all too precious. For this meeting my client assembled my ideal cadre of cross-functional corporate and franchisee representatives - a geographically diverse group, no less. We took people away from their jobs for a day and planned several hours for discussion. And we were still pressed for time. This has been true of every field or franchisee meeting I've attended, and I'll chalk it up to not enough regular opportunity for information sharing.
The Goldmine of Wisdom
Another common theme for me in meetings like this has always been the wealth of knowledge in the room. First, there is the collective experience of franchisees. The anecdotes they tell and the statistics they can spout are truly fascinating, and I can't help but admire the risk they have taken to build their businesses. Corporate team members, too, are heavily invested, and it was noteworthy to see franchisees give credit where it was due for some of the advice they received from their field reps that had paid off.
Business as Unusual
But not everything was old hat, and there were some curveballs to keep me on my toes.
It's Not Just the Prices, Stupid
Often when I present pricing data, the audience is extremely hungry for every nugget of information. This is understandable given the lack of resources devoted to obtaining data. Oddly, the group I met with was less concerned with pricing - they felt they had a good gauge on their guests' price sensitivity - or lack thereof. Instead, the attendees kept bringing up non-pricing topics such as menu offerings, promotions, and of course, the rising cost of goods. While it wasn't my mission to address most of these topics, company representatives heard the messages loud and clear (and not for the first time). It underscores an important point: if a product is good, and delivers on guest expectations, price is less of a factor.
A Lenient Lawyer
Perhaps the most pleasant surprise of the entire experience was the way my client's attorney reacted to my presentation. I had submitted this to my client for legal review, and their lawyer had scant few comments, primarily regarding correct trademark use. Most of us dread dealing with legal, so it was quite a coup when my client said "not bad" when she passed along the critique. Later, I delivered another version of the presentation that included my standard price-fixing cautions. The attorney told me I am a bit more concerned than I need to be. I mean, HAVE YOU EVER? I DEFINITELY NEVER. I'm marking that one down for posterity as it was quite a moment.
All in all, my client is well on its way to a constructive dialogue on pricing. My hope is that the company, and others, make this an ongoing practice now that the ball is rolling.