Your menu does a lot of heavy lifting for your business and brand. Whether online or in-person, your menu is often one of the first impressions you will have on a diner, setting expectations for product quality and service. It reflects your concept and tells your story. Above all these, it is your primary sales tool and your best marketing tool. Considering the impact that this one object has on your restaurant, it’s crucial to take advantage of its power.
Menu Tool-Kit – Step 1
During initial menu planning or review, the following considerations will get you started.
Item Selection: Be mindful of choice. Large or long menus can be daunting for guests to manage and navigate. Unless a huge variety is necessary to extending your overall concept, be wary of offering a large selection. On the other hand, beware of a small menu. You must remember the “fourth person veto” rule. You don’t want to be in a situation where the “fourth person” in a party vetoes your restaurant because they can’t find something they would like to eat. This is why many steakhouses offer a fish or vegetarian option to keep itself within the widest consideration set for consumers.
Layout: Menu layout should start with organization. What categories are needed for your concept? At their most basic level, categories could include appetizers, main courses, and desserts. Classifications can be much more creative, but must adequately categorize your offerings to help guests understand your concept and find what they're looking for. For Luke’s Lobster, items are organized into Rolls, Sides, Seasonals, Soups and Lobster Tails. You will also need to think through the physical size of your menu and the number of pages that you need.
Descriptive Copy: Where it is not possible to appeal to sight and smell, the use of descriptors can help illustrate your food and bring it to life. Using words authentic to the cuisine help pique a customer’s interest. Research indicates that this technique “improves attitudes towards the food, attitudes towards the restaurant, and intentions towards re-patronage”. Handmade pappardelle with rich beef and pork ragu is more insightful than pasta with meat sauce. Felice 64 supplements Italian titles with sensory descriptors that are easy to understand
Design Elements: Menus should be visually pleasing and easy to follow. Guest navigation should be carefully thought out and guided by the owner.
Downplay Price: Avoid using the dollar sign ($) and list prices as a simple “5” instead of “5.00”. Eliminate elements such as a series of ellipsis that lead to the price (Chicken soup……….$5). Excluding these details re-directs emphasis from the price to the product. In a similar way, lining up prices in a column along the right side of the menu makes it much easier for guest to quickly compare how much they will spend instead of making a choice based on the food.
Menu Engineering - Step 2
The actual manipulation and improvement of your menu can begin once your product offering is established and sales have begun. Menu Engineering starts with understanding the numbers. It refers to adding, dropping and repositioning items to maximize sales and profitability. Doing it properly requires a good handle on food costs and how they relate to your menu prices.
First consider each item’s contribution margin (menu price – food cost = contribution margin). To calculate an item’s food cost make a list of all individual ingredients including seasonings and garnishes. Based on the purchase price for each ingredient, calculate a cost per portion. For example, a tomato that costs 50 cents and yields 5 portions would cost 10 cents per portion when costing out an individual tomato and cheese sandwich. Outside of the actual food, account for delivery fees and other expenses related to ordering. Add purchasing cost to ingredient costs to determine the final food cost for each menu item.
The second consideration is popularity. Over a given period of time, popularity of an item is simply the number of times that it was ordered.
By plotting these two metrics, you will be able to categorize menu items and adjust their relative value. Find averages for both contribution margin and popularity; they will become the dotted lines in the chart. Plot each individual item within your unique parameters.
Each quadrant is labeled based on their relation to your bottom line. Let’s start simply.
1. Keep and support your Stars. They are popular items that deliver a high margin.
2. Re-think your Dogs (low popularity and weak margins), consider dropping them if they stay within this category after a second analysis period.
The other two quadrants, Challenges and Plowhorses require more consideration.
3. Challenges have a high margin (profitable) but are relatively unpopular. The following are techniques to help these items stand out:
Use an anchoring technique. Put a lower priced high margin item next to an expensive item. Value is assessed in comparison to what it around it. In the fast casual category its typical to see anchoring used with beverage sizes. When given the choice between small, medium, and large, a customer is most likely to choose the medium
4. Plowhorses are popular items with less than ideal profit margins. Methods to boost these margins include:
Keep in mind that compromising on ingredient quality may not be the best solution for your concept. Fine dining establishments may prefer to increase prices in an effort to meet customer expectations.
To see the best results, complete this menu engineering exercise on at least a quarterly basis.
About the Author: Lauren Keiling
Lauren is a graduate of the Restaurant and Culinary Management Program at the Institute of Culinary Education. Her culinary experience ranges from prep cook and front of house, to catering and food delivery. Lauren has lived, worked, and dined in NYC for the past 8 years.
Headquartered in New York, NY, Servy is a next generation mystery dining platform. Unlike traditional secret shopping, Servy diners for their meal, providing restaurants with organic feedback from their target clientele. Servy helps restaurants measure performance and ensure standards are upheld at all times.
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