Alienating clients with add-ons

[RSteve]

Last week I gave a small presentation on planning catered events. Bear-in-mind, I've been retired for several years. People wanted to know how to plan and negotiate with a caterer. Apparently, they'd all heard horror stories about poor performance or lack of performance, overcharging, understaffing, etc.

The number 1 criticism I heard from potential catering clients was the inability of caterers to efficiently present a total fixed price for an event. That's what they said, but it's certainly not what I heard.

For example: One woman said she was planning a modest noon luncheon for her daughter's wedding. It was plated service for 250. She met with a recommended caterer. The menu was simple; price per plate $28.50 + tax + 18% gratuity= $35.70 per plate, TL= $8925.00. As she was finalizing the contract, the caterer asked if wine would be served with the meal. The woman said, yes, a bottle(s) of wine would be placed at each table. The caterer then said, he charged $1.50 per person, corkage + tax and gratuity = $470.00. "Are you having coffee?" "Yes, of course." " We do charge $1.25 per person for coffee service. TL $390.00 "Oh, by the way, do you want us to serve champagne after the ceremony?" "Yes" "Your champagne, $1.50 per person, service fee= $470.00 "And you said instead of a wedding cake, you're having a dessert buffet; your friends are providing the confectionaries?" Our set-up fee for a dessert buffet is $3.00 per person." With added tax and gratuity= $937.00.

What did I hear? "Steve, the add ons totaled almost $2300, about 25% of the originally quoted price." So, I asked the woman, "What if the caterer had said to you, "Mrs. Smith, I'd be honored to cater your affair. The cost to you per person will be $45.00. That will include champagne service with your champagne, prior to the meal, the meal, including all service of your wine at the dining tables, all coffee, tea, and soft drinks provided by and served by my staff, and full set-up of a dessert buffet, with all items provided by you?" Her reply..."That sounds very fair. I figured this wedding would cost me about $50.00 per plate."

So, I asked, "If the caterer came in under $50.00 per plate, what didn't you like?" "It just seemed like a bait and switch and it made me think that this caterer wasn't reputable, irrespective of all the recommendations."

[bughut]

Thats an interesting and timely story. As I understand you,thinking ahead to cover all eventualities would seem to be the lesson here to maintain professionalism and credibility. Perhaps having a printed price plan ready beforehand would be the thing. Im going to work on that.
I forgot to mention service charge when pricing a 50th birthday party for 150. I emailed the final figures last night and I dont think their going to be happy with an 18.5% extra. I know they'll still use us, and I know they'll pay it, but I feel like a bit of a heel.
Thanks forthe insight

[alongcame]

I personally do no do ANYTHING extra added on besides the mandatory tax because I think it is very unprofessional and hate the add-on feeling myself when buying anything.

If I miss something and its not in that original price, then I am giving it to you, for free, as it is my fault for not considering that ahead of time.

I have contracts signed before every event and with this method there really is no need for giving a price up front and then spouting out the add-ons, ask more questions up front and before opening your mouth think about giving a well thought out response.

Good post!

[foodpump]

Before we gave any prices out we would ask exactly what the client wanted in terms of service: Coffee? Bar-what kind?, Cake; bring-your-own, or do we supply?, etc. etc.. When we had all athe information it would be taken into account and a price given. If you give a price at $25 a head without making these enquiries, that's the price that people have in their heads, and any add-ons makes them think they're getting gouged, and then they either get catty or P.O'd. We'd rather ride the Tour de France with 'rhoids and no seat than give out a price without getting everything nailed down first.

The problem with catering is that people just think it's the same as a restaurant: Menu says that a steak is $25 and that's what they expect to pay. Problem is if you want a wedding reception in a park or hall, the food is the cheapest and easiest part, all the effort goes into co-ordinating the event.

So if you have a knowlegable and educated client, treat 'em like Kings, because the event will in all likelyhood go smoothly.

[shroomgirl]

thanks for the reminder.....I've known this in the past just have not always planned accordingly.

food pump, your analogy is very vivid.

[bbally]

We are all inclusive in the contract. We have the price for the event and that includes everything on the contract. We also go over a three page set planning contract to insure you are not forgetting anything. And it is specific to the numerous facilities we work at, since the staffing and rentals differ at each.

The other thing to remember about the "up charge" or "Add on" type bill pumping. Once it is apparent that you are using that model, guys like me use a "push" marketing technique to kill you with it.

Come with me and I will show you how it works:

"Oh you think we are expensive? Who are you looking at XYZ catering?"

Now I do my market intelligence gathering weekly, so I know what the competition are doing.

To Client:

XYZ Catering usually charges extra for "champagne service" did you discuss that? Oh you might want to ask... they are a little short on helping the client with the whole event, but ask them about champagne service.

Did they talk to you about the "staffing charge" they add on the buffet line? Our prices our inclusive, that makes them look higher, but we don't have hidden charges like some of the lower end caterers. But you might make sure they are not going to charge that staff charge, it is expensive.

Now are you sure they said "Wild Caught Salmon"? They don't usually use that... you might question the price on that product as it is lower then my cost. My guess is it is farm raised salmon. This is what wild caught looks like and here is a bill showing you my costs.

Thanks for stopping by, get those things cleared up with XYZ Catering as we want you to have a great wedding and not a train wreck.

I can tell you they will sign with me the next day when they find out what I told them was true. My insinuation was that the competion lies to get the job and then pumps the bill.

And that is not the worse part for the competitor. The worse part is when the brides friends are getting married she is going to tell them... don't go to XYZ I almost got took!

Marketing others mistakes in handling customers can really push you to the next level with bookings. If a competitor is being dishonest... document it and use it to your advantage.

And don't even get me started on low balling a meal. You take a catering from me that way... you will go bankrupt, I will see to it.