Stupid Recession-Fighting Business Tricks

April 27th, 2009 by Bob Bly

During a recession, many businesses experience a decrease in revenues.

Amazingly, a number are implementing what has to be the stupidest recession-fighting business strategy ever devised: charging customers MORE to make up for the lost revenue.

An article in the Daily News (4/27/09, p. 4) reports that Bobo, a Manhattan restaurant, now charges patrons a dollar for a glass of water.

They justify this by saying that the water is filtered, and the charge is for the cost of the filtering.

The same article also reports that Morton’s, a steak house, has added a $2.50 charge if you want ice in your cocktail.

Another NYC eatery has added a $5 charge for bread and butter, justifying the move by noting they have a famous baker baking their bread.

If you have heard recession-fighting business strategies stupider than these, I’d like to know what they are.

And what would you tell these restaurants if you went to eat there and found these charges on your bill (some post the charges on menus but do not have waiters warn patrons about them)?

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This entry was posted on Monday, April 27th, 2009 at 3:00 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

17 responses about “Stupid Recession-Fighting Business Tricks”

  1. linkfeedr » Blog Archive » Stupid Recession-Fighting Business Tricks - RSS Indexer (beta) said:

    [...] VA:F [1.1.7_509]please wait…Rating: 0.0/5 (0 votes cast) This article was found on bly.com blog. Click here to visit the full article on the original website.During a recession, many businesses experience a decrease in revenues. Amazingly, a number are [...]

  2. dianacacy said:

    I’m a pretty quiet individual, so I’d probably not say anything and just go somewhere else from now on. Luckily, there are businesses who are still using their brains and aren’t too lazy to use them for effective customer service and advertising.

  3. Philip McLean said:

    This is just a really dumb marketing move … putting extra fees on the bill after the service is rendered ensures that the customer’s last impression of you is a bad one. In a highly competitive NYC restaurant market, diners can take their business elsewhere easily.

  4. Susan Martin said:

    Haven’t seen anything dumber than that, except for the customers that agree to pay it!

  5. WallyHank said:

    I would deduct the fees from the waiter’s tip for not advising me of these stupid charges. Then advise the restaurant management that I will help them continue in their recession by telling everyone I know about the bad experience at their restaurant.

  6. Ken said:

    I probably wouldn’t say anything to them…but I would say plenty to everyone else I came into contact with.
    And the only dumber thing I’ve seen a business do during recession is to stop marketing themselves altogether.

  7. A Sure Way to Alienate Customers in a Recession « HEADLINES FROM FLOYD said:

    [...] (Source: Bob Bly’s blog) [...]

  8. Jim Logan said:

    My guess is it’s a financial decision made outside of marketing altogether. The idea is to increase revenue by adding a surcharge for miscellaneous items. Someone in “corporate” must think it’s a great way to raise revenue void of consequences, which of course there are.

    I’d likely find another restaurant. And tell friends to do the same.

  9. Jim Logan said:

    Here’s a story about restaurants doing the opposite: http://www.usatoday.com/money/advertising/adtrack/2009-04-26-tgi-fridays-bargain-meals-ad-track_N.htm

    Here’s the money quote: “Friday’s executives insist that beyond being a recession response, the $5 menu is a way to drum up interest in nine new salads and sandwiches.”

  10. Kevin Stirtz said:

    I would ask that these charges be taken off my bill. And I’d ask if they charge everyone these extra fees. If the restaurants owners 84 year old grandma had dinner there, would she get charged extra for bread and butter? Probably not. And if not, then they shouldn’t charge anyone.

  11. Jodi Kaplan said:

    That reminds me of a post Seth Godin wrote last year about Whole Foods. He ordered iced tea. When told the ice was extra, he balked. The cashier nodded understandingly – and instead of giving him the ice for free, she gave him HOT tea. Why make the customer happy when you can nickel and dime them to death instead?

    Full post here:

    http://sethgodin.typepad.com/seths_blog/2008/08/the-bitter-tast.html

  12. Lou Wasser said:

    If the issue is important to you,send the owner the following letter.

    “Dear Mr. Restaurant Owner:

    As usual, the meal here at La Bella Ristorante was just fine. The service was really excellent too.

    Problem is your recent addition of a $1.00 charge for “filtered water with ice,” per person, discouraged me from ordering the mellow cabernet I customarily order with my meal. And when my friend, who was with me, saw this ‘filtered-water-with-ice’ charge, he felt obliged to downgrade his usual veal parmagiana order to the spaghetti and meat balls.

    The gain to La Bella Ristorante on our dinner for two is $2.00, based on the additional water charges. The loss to you is $6.25 (the price I would have paid for cabernet) and $5.95 (the difference between the veal parmagiana and the spaghetti and meatballs).

    La Bella Ristorante’s total net loss this evening = $12.20 ($6.25 plus $5.95)for food and wine MINUS $2.00 for water — or $10.20.

    I shudder to think of the overall loss to you over the next six months if everyone who eats in your restaurant decides to make the same budget adjustments my friend and I made this evening.

    I want to see your business continue to grow, and I want to continue to bring my friends here.

    If you’d like to talk about this some more, why not phone me at 555-5555?”

    Who knows? You might pick up a copywriting client even if you lose the battle of the water charges.

  13. Brett Owens said:

    These are absurd, hilarious- one more about when US Airways was charging $2 per beverage?

    Technically due to high oil prices at the time, but it seemed nuts to me that they would enrage all of their customers for a lousy $2.

    Best part of it was they tried to advertise it like it was a positive thing – posters saying “coffee, water, etc starting at $2″ – wow what a deal.

  14. Tina Woodall said:

    I was shocked when a very popular fast food chain charged me $.27 for a cup of water. The cashier was apologetic, but apparently it was the new policy at this restaurant. I don’t know if this was a store, franchisee or corporate level change.

    I found it so amazing since fast food chains are trying to go ‘upscale’ bistro. Don’t know why this so shocked me, but I actually don’t want to go back to this place again.

  15. Phil Wrzesinski said:

    I run a highly successful independent brick & mortar toy store (http//www.toyhouseonline.com). We keep looking for ways to charge less and give our customers more for free. Generosity creates lots of word-of-mouth. Hmmm… Maybe that’s why we’re highly successful??

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