Pay-As-You-Want: A Social Experiment Over Souvlaki

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Paula Douralas anticipated some problems when she decided to let her customers pay what they felt like paying at her Greek restaurant. She worried that some would pay too little and that others would pay nothing at all. What she didn’t anticipate was how the more subtle human behaviors could get in the way of her plan.

The Santorini Grill (photo: Gloria Dawson / The Brooklyn Ink)

Paula Douralas anticipated some problems when she decided to let her customers pay what they felt like paying at her Greek restaurant. She worried that some would pay too little and that others would pay nothing at all. But business wasn’t great and she thought that a month-long gimmick just might get people in the door.

What she didn’t anticipate was how the more subtle human behaviors could get in the way of her plan.

The Santorini Grill, Douralas’ small Greek restaurant, sits on the corner of Bedford and Grand, a few blocks away from the busy Williamsburg restaurant scene. Greek flags adorn the outside of the three-year-old restaurant whose owner has made it impossible to miss her new pricing strategy. “Pay what you feel the food is worth,” read a sign outside. A chalkboard placarded exclaims, “The craziest Greek Deal!!!” and “Pay as you feel!!!” There’s also a small piece of paper stuck in the window that reads, “The bailout starts November 4th.” Many still pass it by.

“People are shocked, afraid of it. I can see it in their faces,” said Douralas, while taking a smoke break in back of the restaurant. Douralas, 55, has cropped blonde hair and a blunt but good-natured attitude. “They go by. They read it. They are like ‘What is this? It’s too good to be true. What’s the catch?’”

When the customers do come in, she emerges from the kitchen to put them at ease. Douralas tells them, in her accented English, how she came to the United States from Greece when she was 11 years old, “There’s nothing to be afraid of,” she tells them. “I do not use people. Just enjoy your dinner.”

Still, the plan did make two frequent customers, Brian Clyne and Bian Tolle, a bit nervous. Like Douralas, they were concerned that some customers wouldn’t pay for their meals. They worried she’d be taken advantage of.

The Santorini Grill offeres a different sort of Greek bailout plan. (photo: Gloria Dawson / The Brooklyn Ink)

The payment plan, they say, wasn’t out of character. Douralas, says Tolle, is a generous woman who regularly gives customers free dishes, and feeds the homeless from the kitchen. They shared their concerns with Douralas who nonetheless told them, “’Lets go for it.’ Clyne and Tolle were persuaded. “We thought that was the right way to approach it,” said Clyne.

The idea isn’t novel. Douralas had heard of a restaurant in Canada that adopted a similar plan. A few restaurants in Europe do it all the time.  Panera Bread, an American bread and sandwich chain restaurant, offers pay-what-you-want plans at a few of its branches, which are set up as non-profits. The non-profit organization One World Everybody Eats foundation operates pay-what-you-want restaurants throughout the United States.

Douralas, however, has bills to pay. She was hoping the plan might generate some news coverage because she couldn’t afford to pay for advertising. And the new payment plan been indeed been mentioned in The Wall Street Journal, the Gothamist, and it even made New York Magazine’s list of reason’s to love the city. She insists that the plan is working, although, on a recent Friday night, the restaurant was about half full.

“It hasn’t hurt me,” Douralas said. “It brings a lot of people that didn’t know I existed.” She said the first three weeks were busy with all the media attention, but now she has a steady stream of new diners and estimates a 15 percent increase in customers. She has recently decided to extend the pay-as-you-feel plan indefinitely,

Still, there is a risk. There’s a danger of disrupting the social contact between patron and owner, according to Professor Martin Natter, Chair of Retailing at University of Frankfurt in Germany who co-authored a paper on pay-what-you-want pricing mechanisms for the Journal of Marketing in 2009.

The study found that customers may appreciate the novelty of the concept and that long-term relationships and loyalty to a certain business may increase the price paid.  “If several persons jointly visit a pay-what-you-want restaurant, social norms may be pretty strong,” he wrote in an e-mail. “Nobody wants to lose his face by paying very low prices.”

In fact, that jibes with what Douralas discovered: many of her regular customers, she says, pay more for their meals than they had before the experiment began. Some ask for the old menu, so they can see what she had charged. When Douralas started the new payment plan she didn’t tell new customers about the old menus.

The result was some confusion. New customers had to quell their fear that the whole pay-what-you-feel deal wasn’t a scam. Then they have to navigate a menu that lacks both prices and descriptions of the dishes; diners are left to ask the waiter or often Douralas herself what, precisely, they’re ordering. (The food is standard Greek fare done well.)

Then came the check. The bill includes prices for beverages (drinks are not on the new plan) and a list of everything that’s been ordered. It is left to the customer to decide how much the meal was worth.

Customers are asked to keep tips separate from the bill payment. Waitresses can get upset, Douralas says, when people leave nothing or very little, and about three percent abuse the system. There was a group that came for the first three Saturdays that she offered the pay-as-you-feel plan and paid very little. She bears full responsibility. The plan “was my choice,” she said with a shrug. “I trust in God. I trust in people. I trust in my cooking.”

Now, over a month into the experiment, Douralas will tell all her customers about the old menu with the prices on it and gives them the option for either menu. She still doesn’t understand the resistance. “I’m trying to understand the mentally and I can’t,” she said. “For me I would judge the food for what it was. We all know how much a salad is.” But, she added, “I can’t push my customers away.” If they want to use the old menu, she’ll give it to them.  Douralas has a lot riding on her food and the people she serves.

Some customers have let her down before. She used to serve saganaki, the Greek cheese and lemon juice dish, the traditional way: “We used to light it on fire, but then someone got burned. You have to be Greek to know how to do it.”

Maybe so. But not, to her thinking, when it comes to deciding what her meals are worth.

 

Santorini Grill                                                                                                                                                                                                        167 Grand St., Brooklyn, NY 11211
near Bedford Avenue

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3 Responses to “Pay-As-You-Want: A Social Experiment Over Souvlaki”

  1. Web Dude
    January 10, 2012 at 10:46 AM #

    Very cool concept Paula! We just featured this article over at – http://www.facebook.com/myparea – please join us!

  2. Denise Cerreta
    January 10, 2012 at 2:07 PM #

    I Admire Douralas for her initiative and trust in her cooking skills and her community to support her.
    The ‘pay what you can’ concept that many community cafes throughout the country are doing should be further explained. Unlike a restaurant that decided to let customers price their own food as a gimik to increase business and perhaps receive some media attention, the community cafes are intentionally providing this option to increase food security in their community.
    In addition to pricing your own meal selection, volunteer options exist to earn a meal while learning a skill in the food service industry. Many of the cafes offer options via plate size or complimentary dishes so that those in our community on a more limited budget can still come to the table.
    Like Santorini Grill, we all need to meet expenses and payroll. I hope as Douralas continues on with her experiment she considers other ways that people could eat in her restaurant. I am happy to offer my support and plan to stop by and eat the next time I am in Brooklyn!
    Best,
    Denise Cerreta
    Founder, One World Everybody Eats Foundation

  3. betty
    January 10, 2012 at 9:44 PM #

    Way to go Greek girl; so proud of you for doing this. Makes me so happy to be a Greek; we give freely and expect nothing in return. I hope God blesses your business; your family, your health, your relationships. Best wishes to you and yours.

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