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If you own or manage any restaurant, you’ve probably realized that there’s much more to your business than just making tasty food. Menu engineering is one of the biggest factors when it comes to menu success in restaurants, cafés and other food service outlets.
What makes a good menu? How do you make sure it works for your business? This article will cover everything you need to know to get started with menu engineering and see an improvement in your sales.
If you don’t have the right strategies in place, it can be incredibly difficult to figure out how to make your hotel or restaurant business grow and keep customers coming back, but with some careful planning, you can achieve both of these goals at the same time.
What is Menu Engineering?
Menu engineering, also known as menu optimization, or menu structuring, is the process of structuring food and beverage menus in order to maximize sales and profit.
You can see it as a way of manipulating people’s purchasing decisions when they’re faced with a menu by structuring prices and language on a menu in order to increase sales of high-profit items and encourage upselling.
When applied properly, it can dramatically increase profitability without having an impact on quality or service. It’s also not something that’s just implemented at fast-food restaurants. Some higher-end establishments use these techniques too. Here’s how it works and what it looks like when done correctly.
Why Use Menu Engineering
You’ve probably heard it before, but menu engineering is a marketing tool that restaurants use to control portion size and increase overall meal prices. By shrinking your plate’s perceived size or by concealing higher-priced items at different depths on a menu, for example, a restaurant can trick customers into thinking they’re getting more for their money.
Menu engineering affects all types of consumers, from eaters on a budget to those looking for something healthful. If you want to know more about how restaurants profit from menu engineering techniques (or if you want advice on how not to be manipulated).
How Menu Engineering Works
First, you need to determine which customers are your most profitable, and then design your menu around them. Sounds easy, right? The problem is that doing so isn’t as straightforward as it seems. To practice menu engineering effectively, there are several things you should consider.
For starters, when identifying profitable customers – or your target customer profile – look for an assortment of attributes that make up their total meal expenditure (including non-food items) and food cost percentage. If a group of people who spend 75 dollars on meals each month has less than 40% food cost percentage, they’re likely in that target customer profile.
Examples Of Menu Engineering
Use these real-world examples of menu engineering from some of today’s most respected food brands to better understand how menu engineering can boost sales for your own business. Before diving into menu engineering, you should familiarize yourself with a few popular strategies. You’ll find them exemplified below.
A one price policy is when a restaurant has only one set price for all items on its menu. One of my favourite examples is In-N-Out Burger (in case you were wondering). At In-N-Out, there are no secret items or limited time offers that get posted on social media.
Benefits of Menu Engineering
Here are some benefits you stand to gain when you implement menu engineering in your restaurant:
- It leads to a reduction in food waste
- It helps draw customer’s attention to items of higher value
- It also helps your customers understand what food is good
- Know what you need to pay more or less attention to
- It helps business owners upsell extra items
Who is involved in Menu Engineering
Menu engineering is a one-man thing. It is equivalent to a team sport. The captain in this context is the restaurant manager. He works with the chef, restaurant owner, stewards, and customers to have a fully optimized menu. Both customers and stewards provide real qualitative data to complement the insight you’ll churn out from the POS sales system.
How To Do Menu Engineering
- Choose a time frame
The first step in engineering a menu is to select a time period to select a time frame to do a detailed analysis.
You can decide to do menu engineering quarterly, monthly, or both. Ultimately, it is advisable to do this in line with of seasonality of the produce
- Cost your menu
To calculate your cost and margins manually, you need to critically examine your current menu and then start breaking them into segments. You can get insights into your restaurant’s POS system.
You can begin by segmenting them into starters, mains, and deserts. Once you have achieved that, you then move into finding the cost of production of the segment. Your chef can work on this aspect.
- Segment your menu items based on popularity and profitability
Menu engineering matrix is done based on popularity (items sold on a per-date basis) and profitability (items sold on a per-serving basis). With the matrix below, you will be able to identify ways to optimize that of your restaurant or hotel:
Stars – High Profitability, high popularity
Items that fall in the Stars category are already doing well in terms of popularity and profit. You can add them to your specials and ensure that your staff always suggest or recommend these dishes to customers. It will help increase your profit margin.
Plow Horses – High popularity, Low Profitability
There are some items that have low-profit margins but are no doubt everyone’s favourite, and they usually generate great sales. Take a closer look at the consumption level, if you notice food wastage, you can decide to reduce the portion, take out one or two ingredients for something similar or better.
Dogs – low profitability, low popularity
The Dogs on your menu are those items that are neither popular or profitable. It is time to let them go. But before you let them go, you can tweak the name, do a recipe modification, or even revise the description.
Puzzles – Low Popularity, high profitability
The puzzles are the most complex items on the menu. They have a high profitability rate but low popularity. It won’t be advisable to touch these items since they still bring in cash. instead, as your stewards to promote them aggressively. You can decide to give them special spotlight on your social media pages.
- Redesign your menu
Menu engineering is both fine art and science. Redesigning your menu is the fine art aspect of it.
It is a common practice for customers to scan your menu for only an average of 100 seconds. This means that you only have a little time to influence the customer’s decision. Below are some ways you can employ psychology in your menu:
- Use Colour
Study has shown that a lot of people respond quickly to colour in various ways. Be sure to choose bright colours like orange, yellow, and red to capture the attention and trigger appetite of your guest.
- Ensure your menu is scannable
Keep the design of your menu simple, easy-to-read and have the right fonts. The layouts of pictures and texts should be in order. Even if your menu is more than a page, guests shouldn’t have a hard time finding items on the menu.
- Limit the number of options on your menu.
The “paradox of choice” states that the more options we have, the more anxiety we feel. Limiting the choices on your menu is a way to ensure that the guest patronizes what’s on the menu.
- Include a separate dessert menu
If your customers see an eye-catching dessert, chances are that they are most likely going to skip an appetizer. Surprising guests with your dessert menu after dinner is a way to increase appetizer and dessert sales.
- Use photos properly
Excessive photos can lead to low-end, cheap venues, so high-end restaurants usually avoid photos. You can limit it to one photo per page. If you still want to share more photos of your dishes, your social media pages can do this for you.
- Choose a menu size.
Customers do not like physically oversized. So ensure is handy and mobile.
Promote profitable items on menu
Now you know that stars and puzzles have high profitability, it is time to push it to reach more customers. Here are some ideas you can implement:
- Tweak the menu copy to be more enticing to customers so that they pick your profitable the items on your menu.
- Pay attention to professional styling and photography. Use standard imagery of your profitable menu items on your website where these items are listed near the top, and they can feature within enticing meal delay.
- Ensure your profitable menu items feature regularly on your social media channels. From provenance to preparing the dish, build up the narrative and make it part of your brand story. Always try to communicate at specific intervals to target breakfast, lunch, and dinner lovers. For instance, you can keep a tantalizing cheeseburger picture until about 8am as it will at 5pm
Menu engineering is one of the most effective ways to increase your customer satisfaction and sales without spending more money, which makes it an excellent addition to any restaurant owner’s toolkit.