Paris Marquez
TOA:
Why Banning Tips Can Be a Risky Strategy for Restaurants
Published: April 30th, 2018
Summary: Restaurants have started to take away tips, and instead give higher wages to the workers that way the money is spread more evenly throughout the staff. Although this seems to make a lot of since, a research team has discovered that since testing this new style out, restaurants have started getting bad reviews and losing money. Michael lynn, A researcher and professor for Cornell University believes that taking away the customers ability to reward good service has ultimately damaged reviews and revenues. Further trying to prove his research, Lynn looked up yelp reviews over Joe Crab Shack who is one of the no tip restaurants and saw that 18 of the 131 Restaurants were suspended.
Analysis: This Article really magnifies the importance of research, and the study of Human behavior. Although the restaurants thought they were doing good by making wages evenly. They clearly didn't correctly calculate or take into consideration the feedback customers would give. Had Joe's Crab Shack took more time into research, they most likely would have not lost so much revenue. This Article relates to our class and the section where understanding how to target market customers and find what they like can really make or break a business.
It would be interesting to analyze the marketing mix for this article. The taking away of tips definitely falls under "price," but might end up affecting the quality of the "product" as seen in the article.
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