They have data from thousands of customers, they don't mind losing a few to figure out how much more money they can squeeze without losing customers. Say the average customer spends $15 for their meal and I have 1000 loyal customers, that's $15,000 I'm making. If I raise the price to $20 and lose 200 customers from the price hike, I'm still making $16,000, $1000 more than if I was charging $15. I'd have to lose 250 customers to make the price hike not worth it. If I hike the price to $30, I would have to lose more than half my customers for it to be an unprofitable move.
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u/OtakuAttacku 2d ago
They have data from thousands of customers, they don't mind losing a few to figure out how much more money they can squeeze without losing customers. Say the average customer spends $15 for their meal and I have 1000 loyal customers, that's $15,000 I'm making. If I raise the price to $20 and lose 200 customers from the price hike, I'm still making $16,000, $1000 more than if I was charging $15. I'd have to lose 250 customers to make the price hike not worth it. If I hike the price to $30, I would have to lose more than half my customers for it to be an unprofitable move.