When Erin Childs was hired on as Boloco’s catering director, her goal was to create a marketing campaign that focused on product quality and customer care. Childs doesn’t believe in discounting so her plan is based on the 12-month calendar year and promotes products and services tied to specific events.
As examples, an Earth Day promotion in April highlighted that 10 percent of every catering order would be donated to Boston Harbor Alliance. She also will send cookie platters to clients during the holiday season and gives a free lunch to people who place catering orders over $150.
“People who are local really enjoyed the Earth Day promotion because they liked knowing part of the proceeds were going to the islands in the Boston Harbor,” Childs said. “And sending cookie platters during the holiday season is our way of giving back and saying ‘thank you’ to our customers. I don’t believe in discounting because I believe that people have money to spend and I believe that we’re fair priced,” Childs said.
When companies offer discounted services, they are sending a strong message to their customers that their services aren’t worth the cost.
“From a buyers perspective, there will be an immediate dissatisfaction with the purchase simply because they don’t know whether they got a good deal,” Furtwengler said. “They know they reached a deal, but they don’t know whether they left money on the table. It’s an uncertain and unsatisfying experience. Plus, the discounters and people who use them are really, without realizing it, targeting price buyers who are the least most loyal and cost difficult to please.”
When looking to establish the right pricing strategy for catering clients, catering directors should:
1. Differentiate themselves with marketing campaigns that reflect the catering service and its value.
“If you’re doing a good with differentiating yourself and your charging a price that reflects the value of your service, people will tend to trust that and are willing to pay a high price,” Furtwengler said.
2. Have a price and stick to it.
“When you use the low-price strategy as your brand promise, you have to continuously use low prices to keep customers happy and there’s a point at which you can’t lower the price anymore. And then you’re failing to meet your brand promise. When that happens, people start looking for alternatives so they’re going to get more of what they want,” Furtwengler said.
3. Work within the catering clients budget and tailor the order to fit their financial needs.
“You ask what they are willing to pay and then you make eliminations to meet their budget, but you also let them know what they’re giving up. The negotiation has to be structured in such a way that in order to get the lower price, the customer has to give up something. You’re forcing that buyer to make an informed decision to consciously evaluate what’s important to them and what isn’t,” Furtwengler said. “This allows them to be more comfortable with the decision they made.”
4. Have a clear picture of your customer.
“I’ve read in articles that the most important person in my world is the one ordering. So if I can take care of them that’s all that matters,” Childs said. “The thought behind our free lunch is that usually people who are placing the order aren’t receiving the food for themselves because they’re doing it for their boss or for a meeting. At least, in this case, the burrito is made specifically for them so they’re not eating picked over food; it’s just for them so they can get their own hot meal.”
5. Create specific catering packages.
“What I do with my clients is that we create three bundles of offerings and we do that for several reasons. One is that it gives the buyer some choices so there is a greater likelihood it will meet one of their budgets,” Furtwengler said. “If I offer you a catering menu and you say that’s more than what you want to pay, and then I offer something at a lower price, the law of reciprocity says you’re more inclined to reciprocate more than what was anticipated. There is a greater likelihood you’re going to make a sale because you’ve got these options.”