Restaurant Menu Engineering: A Recipe for Success

Menu & Cutlery on A Restaurant TableRestaurant menu engineering is the delicate art of creating a menu that successfully targets guest psychology and purchasing habits. It’s the practice of guiding restaurant guests to the most profitable (and popular) items on your establishment’s menu.

Menu engineering combines aspects of marketing, psychology, graphic design, and food cost calculation in order to truly leverage the power of your most important promotional document; your menu.

Determining Contribution Margins

It’s imperative that your recipe costs be accurate before beginning the engineering process. Be sure when determining the cost of an item that you’re factoring in cost of sauces, garnishes, etc.

Effective menu engineering depends heavily on the profitability of your menu’s dishes. The contribution margin is the number you really want to focus on here.

Contribution margin is simple enough to describe, it’s defined as Menu Price of Item  minus  Cost of item. This measure is the dollar amount you ultimately end up banking off each individual item. Examples:

Clubhouse Sandwich

  • Cost: $4.79
  • Menu Price: $10.99
  • Contribution Margin: $6.20

Prime Rib Burger

  • Cost: $5.25
  • Menu Price: $12.99
  • Contribution Margin: $7.74

In this case, let’s push the Prime Rib Burger. Right?

Who’s Winning the Popularity Contest?

The other key ingredient to your engineering plan is determining the popularity of each menu item. If you’ve got a POS system worth its salt, it should not be hard to delve into its records to determine your most popular dishes.

Contribution margin tells you how much each sale of an item adds to your piggy bank. Popularity speaks to how often it sells. With those two factors determined, it’s time to do some organizing. The Prime Rib Burger has the higher contribution margin, but is it selling well? The answer to that question will help determine its placement.

Finding Your Superstars

Boston Consulting Group’s Growth-Share Matrix is often cited as the best method for categorizing menu items. It breaks items down into the following four categories:

1. Stars – These items offer both a high profit margin and sell consistently. Your menu should absolutely highlight these major players. Give them the best placement, highlight them on the page anyway you can, and have serving staff mention them regularly.

2. Plow Horses (or Workhorses if you prefer) – Items that sell well enough, but offer lower profits per plate. Consider reworking these items to reduce cost without sacrificing quality. It could involve removing a garnish or subbing out one particular ingredient. They sell well so don’t alter them too much, but find ways to decrease overall cost per item.

3. Puzzles – Items low in popularity, yet high in contribution margin. These may need a reinvention or even a slight price slash to increase sales. Consider having your serving staff more aggressively promote them to drive sales, or feature them in a promotion. They’re high in profit, so don’t completely marginalize them.

4. Dogs – Low in both popularity and contribution margin. If you can remove them from the menu, it may be the best course of action. If they’re still considered staples, consider at least deemphasizing them on the menu. Simple descriptions, no images, etc. Talk to staff and try to find the exact reasons these aren’t selling well.

Note: It’s recommended that in categorizing menu items you rate appetizers against appetizers, desserts vs desserts, etc.

Once you’ve done your costing and identified your good and bad performers, it’s time to think about menu placement and design.

Menu Design

Here is where you’ll use positioning and visual cues to more effectively highlight those star dishes. Without getting too heavily into aesthetics (e.g. font choice, color scheme), here’s a few things to keep in mind.

1. Contrary to long-standing popular wisdom, the idea that guests tend to focus first on the top right-hand corner of the menu (the supposed sweet spot) may not be entirely accurate.

In 2012, research from San Francisco State University claimed that by tracking study participants’ eye movements it was found that people typically read menus from left to right, like a book. Even the Wikipedia entry for Menu Engineering states that “to date, there is no empirical evidence on the efficacy of the sweet spots on menus.” Keep this in mind when designing your layout.

2. Highlight the profitable dishes. If you have limited space for images, make sure it’s your star performers being showcased visually. Place them in borders or boxes to really make them stand out. Add language such as “House Favorite”, “Signature Dish” or “Chef Recommends” to better bring them to a diner’s attention.

It should also be noted that there is debate about using images. Some feel that – in more upscale dining establishments at least – photographs have a way of lowering perception of a restaurant’s quality.

3. Be mindful of how many items you’re highlighting throughout the menu. Highlighting too many items could lessen the impact of your efforts. Really focus on one or two items per category (apps, entrees) for maximum effect. If everything is special, nothing is.

4. Never organize items by price. Take the guest’s focus off the item cost as best as possible. To that same end, try not to right-align prices on the menu as this tends to make them stand out far too much.

5. Research seems to confirm that dropping the dollar sign from a price can indeed increase overall guest spending. (Source)

6. List order definitely matters. Again, if diners are reading menus like a book they’ll read top to bottom. Feature the star dishes at the top of a list, and maybe slip one at the very bottom. Items just above the very last item tend to be the most ignored.

Remember, menu engineering isn’t just for your restaurant’s printed menus. Keep all of these concepts in mind when creating online menus, drink and dessert menus, table toppers, and menu boards.

Interested in saving money on both food and labor? Be sure to download the free ebook below!

This post originally appeared on FoodTender.com’s Restaurant Strategy Blog.

Restaurant Cost-Saving Practices

 

Online Ordering and Your Restaurant: 9 Things to Consider

online_ordering_for_restaurantsOnline ordering is quickly becoming a must-have in your restaurant’s digital toolbox. Allowing customers to order directly from your restaurant’s website can greatly increase both your delivery and pickup revenue. What restaurateur wouldn’t want to see a nice boost in takeout business?

The National Restaurant Association notes that nearly a fifth of today’s customers say technology options are an important feature that factors into full-service restaurant choices. As well, 24% of 18-34 year old diners said they consider a restaurant’s tech options when making their dining plans.

Here are some key points to consider when developing your restaurant’s process.

1. Online Ordering for Restaurants : It Starts with a Call-to-Action

Any actions you want customers to take on your website need to be supported with calls-to-action. Add a prominent button or icon to your home page marked “Order Online Now” or something similar. When visitors enter your website, they should see these calls-to-action right away.

2. Add Social Media to the Mix

Integrate your online menu with your social media presence. Facebook has now made it easier than ever to upload and display your menu on their platform. They know the importance of online ordering for the restaurant industry and have taken steps to make it as smooth as possible. Consider using any number of online ordering applications that integrate with your Facebook page. Examples include OpenDiningChowNow, and GloriaFood.

3. Make Sure It’s Mobile-Friendly 

Keep in mind that 50% of mobile phone users now use mobile as their primary means of surfing the web. Be sure whichever system you’ve implemented as your online ordering solution looks good on any mobile device.

4. Leverage Existing Technology Partners

When deciding on the right online ordering software, try discussing the issue with your current POS provider. See if they have a list of online solutions that effectively integrate with your POS system. Your POS partner may in fact already offer their own online ordering solution. This could make your decision easier, but do the research anyway. The day may come when you decide to switch POS providers.

5. Build a Database and Get Creative

One benefit of online ordering is the ability to create a robust customer database. Capturing names, email addresses, phone numbers, and purchase histories will be vital for future marketing campaigns. Make sure somewhere during the process that you get permission from customers to send them future emails. This is a golden opportunity to build your email marketing list. These customers are definitely interested in your product, they’re already ordering it!

We’ve heard of restaurants using this information to send out notices on those low-traffic storm days. Those occasions serve as a good reason to send your database a quick email reminding them of your online ordering options.

6. Save Money by Reducing Errors

Besides the time saved from online ordering (customers are doing the bulk of the work), keep in mind the amount of money to be saved by reducing communication errors. When someone self-orders their meal, you’re eliminating the possibility of a miscommunication between customer and server.

Be sure you have an option to easily produce a full written copy of the customer’s order. Imagine having that ready the next time a customer comes in claiming their order is incomplete or incorrect.

7. Make Payment Easy

Whichever service provider you choose, it’s imperative that customers are not only able to order the food from your website, but can pay for it right away. Make it as simple as you can for payment to take place and be sure to have an option for storing their payment information. That makes it even more likely that customers will return for future ordering.

8. Ask Questions, Lots of Questions

Choosing the right provider and developing the right online process requires some reflection. Take some time to think about the options and functionality you want your ordering experience to include.

  • How flexible will it be for customer substitutions?
  • Are there fields for customers to note important allergy instructions?
  • Will there be a minimum purchase requirement? A maximum?
  • Is it going to be available in languages beyond English?
  • Are there options that facilitate upselling and add-ons?
  • Can customers include a tip for the delivery/take-out worker as part of their payment?
  • Can it remember the customers’ previous order(s)?
  • Is there an option to redeem gift cards?

9. Have a Plan for Website Outages

It’s never a good thing for your website to be offline, but if you’ve invested a lot of time and effort into driving online sales a downed website can cost you serious money.

– Have a plan in place so you know exactly who to call as soon as a problem is spotted. Make certain you have the correct support phone numbers and email addresses at the ready.

– Halt any planned emails or ad campaigns until the outage is corrected. Make sure to pause any emails that may be set to launch that day.

– Use your social media accounts to let customers know of website issues and alert them to alternate ways to contact you (phone, email).

– Finally, consider using a website monitoring service (there are free options out there) to alert you of website slowdowns and outages. Also, consider having your updates go to an email address provided by a service other than the one hosting your website. Perhaps have them sent to a gmail account, or to your mobile via text.

This post originally appeared on FoodTender.com’s Restaurant Strategy Blog.