How much would you pay at a coffee shop with no cashiers?
There have been numerous studies on how we pay a substantial amount of money on our daily coffees. Cafes and bistros are clearly not very reasonable with their price charts, regardless of how great the coffee may be. Many chains have affordable brews but the moment you want to have more than just a bland coffee, you are asked to pay substantially more.
How Much Is It Worth To YOU?
How much would you pay at a coffee shop with no cashiers, no price list and no serving staff? If you have complete free will to take your coffee and pay whatever you want without being legally bound or penalized in any way, how much would you comfortably shell out?
A Different Business Model
The answer seems to be in The Vault. It is a coffee shop in Valley City, ND. It has launched a unique and quite weird business model, which allows customers to pay whatever they feel like for their coffee or snacks.
This system is not entirely new because it has been used in many studies and surveys. Companies like Coca Cola have used promotional campaigns where the honor system has allowed people to pay whatever they felt like, before or after having their drink.
Charge Nothing but Make More?
The Vault has some interesting revelations about our approach to paying. The store owners have observed that they have been generating a revenue that is 15% higher than what they would have generated had they gone ahead with their ask prices for the products.
In other words, people are paying more for the coffee and snacks than what they would have if there was a price list. This comes in direct contrast with the popular notion that we are tired of high prices and wouldn’t want to pay as much as we do to major chains like Starbucks or Baristas across the country.
Does it Work Everywhere?
Experts are of the opinion that the honor system as a business model works well when we talk about small towns like Valley City, which has a few thousand people. However when you try to replicate the same success in a large city like New York, it is bound to fail.
Small town folks are more concerned about their reputation. They like the fact that the owners of a business trust them and as an appreciating gesture they pay more. That wouldn’t happen in a major city, where theft alone would run the business into loss.