Note to self: Think twice before offering a ‘pay what you want’ promotion

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(This post originally appeared on The Washington Post)

Ask any business owner anywhere in the world and they’ll tell you that attracting new customers is always a challenge. Things are no different in the Chinese city of Guiyang, where a new restaurant decided to run a one-day promotion that let customers eat as many dishes as they wanted, for whatever price they felt they’d like.

Suffice it to say, the promotion didn’t go so well. According to this report in Shanghaiist, some diners paid only about 10 percent of the cost of the food with others leaving as little as 1 RMB (Chinese yuang) – that’s 15 cents. In fact, in its first week of operation after opening earlier this month, the restaurant lost 100,000 RMB, or the equivalent of about $15,000. Bear in mind that the average annual wage for the typical worker in China is about 29,000 RMB, or about $4,300. This was not a small loss. The promotion quickly fell apart and one of the partners left the business, vowing not to return, according to the media outlet.

“If our food or service was the problem, then that would be one thing,” the owner, Liu Xiaojun, told Shanghaiist. “But according to customer feedback, our dishes are both filling and tasty. It’s just that the payments don’t match up with the evaluations.”

The worst part? The promotion was designed to entice people in for a cheap meal with the hopes of them coming back as regular customers. By late afternoon on the day after the promotion ended not a single customer returned.  Zero.

There is one bright side to this story:  Liu’s restaurant is getting some pretty good press, even here in the U.S. So if anyone reading this happens to visit Guiyang, please make sure to stop by and have a meal. Unfortunately, the Shaghaiist piece never mentioned the name of her restaurant, but how hard can it be to find her?


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