You don't need me to tell you that you're in a tough position right now. On one hand, you have runaway price increases forcing you to make long-overdue price increases. At the same time, the recession has guests cutting back, sometimes drastically, and looking for lower prices. What to do?

My ongoing weight loss project has led me to some interesting research spelled out in a book called Mindless Eating, some of which can be applied to your current dilemma. Case in point for this week: portion sizes.

First of all, most Americans eat far more than they need to as evidenced by the increased focus on obesity in this country. Americans tend to eat fairly fast, not stopping until they are full or until the plate is empty. Europeans, in contrast, eat more slowly and stop eating when they are no longer hungry.

Research at Cornell University has shown that people can eat 20% less than they currently do and still feel perfectly satisfied. Cut the portion by 30% and they will notice but if the portion is 20% less and the plate is empty, few diners will even be aware of it. This is research you can work with.

The important number is not an item's selling price but its gross margin -- how much money is left to pay the bills after you put the food on the plate?

My radical suggestion is that instead of raising prices, cut the portion by 15-20% and keep the menu price unchanged. You would probably find the item was just as profitable for you, the guest would still be happy and they might even start losing a little weight. Look what Jared Foley did for Subway!

You still need a great visual presentation, of course. This will call for smaller china pieces to make the portion pleasing to the eye ... but you're probably overdue for a new look anyway, aren't you?

Adopting a strategy like this, even on a limited basis, would help keep you from getting hooked on coupons. (That's what everyone else is going to do. That fact alone is reason enough not to go there). We will discuss this idea in more detail on the next Gold Group teleconference. I hope you will join us on the call.

This series of recession-fighting strategies will continue in the EHC Special Edition until I run out of ideas. Was it worth 75 cents to you? If so, sign up for the Special Edition ... or hope your competitors don't discover it!

 

The books are in the warehouse and I have finally received my working stock. About 2/3 of the advance orders were mailed last Friday and the rest of the orders were shipped by Priority Mail yesterday.

My thanks to those action-oriented folks who took me up on the pre-publication deal ... and thanks for having patience in this age of instant gratification.

 

• Time Is Not On Your Side - how to kill your business even when you don't have much competition.
• It's About The Food, Stupid - a case study on what it takes to succeed in the new marketplace ... or not.
  
• Creating The Buzz - the simple truth about how to generate word-of-mouth.
  
• What Did You Learn From Your Staff Today? - an insight into how the most important lessons you learn from your staff ... are about yourself!
  
• Special Offers on management resources and services.
  

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