Tuesday, August 28, 2007

Can you brand a brand that charges nothing?

Today's Wall Street Journal (8/28), in an item titled "Voluntary Pricing Lets Small Eateries Give - and Get Back," talks about cafes that sell food without charging for it. That's right--places like Terra Bite Lounge, One World Cafe, and Six 89 operate on a pay-what-you-want basis. The idea is to make money from those who pay a little more generously than they need to, while helping out those who can't afford a meal.

Does this kind of payment system make branding sense? On the one hand, notes the article, "the marketing buzz such a scheme generates can help a business stand out from the pack." On the other, I think, having a no-price payment system, with a unique selling proposition that involves feeding the poor, makes the whole thing seem like a soup kitchen. That is not an appealing image.

The success of this kind of business depends on finding the right kind of customer, as the article notes, "one who understands the concept and, therefore, contributes appropriately." Apparently there are those kind of customers out there in states like Washington, Utah, and Colorado. But I'm not at all sure that the model extends to urban metropolitan centers like New York, which is where One World Cafe founder Denise Cerreta plans to open a pay-what-you-want cafe. You never know--but it seems unlikely to me that the model will gain mainstream traction.

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