Even while online sales skyrocket, you still need to maintain a good in-house menu. Menu engineering is the study of the profitability and popularity of menu items and how these two factors influence the placement of these items on a menu in order to increase the profitability per guest. The concept of menu engineering is based on research done by the Boston Consulting group that allows businesses to better organize, analyze, and react to their sales numbers. And this type of engineering is applicable to all menus, hardcopy and digital.
It is estimated that nearly 60% of all restaurants are not doing any menu engineering. And of the 40% that do, only 10% of them are doing it effectively. Which means, that over 90% of restaurants can easily increase profits of 10%-15% on an ongoing basis with menu engineering. Here’s how to start.
The menu engineering process can be broken down into four easy steps:
- Cost your menu.
- Categorize menu items according to profit and popularity levels.
- Design your menu.
- Test your new design.
Costing Your Menu
Costing your menu is the process of quantifying the exact cost of each item on the menu. And although the job can be time consuming, the is first and foremost the most important step to get right, as all subsequent decisions will be based on this step and accuracy is critical to success.
Categorize Menu Items According to Profit and Popularity Levels
Split your menu into “categories” and “sections”. Categories being broad, such as appetizers, entrees, and desserts making sure there is no overlap of food items. Then break your categories into sections. For instance, in entrees create sections for seafood entrees, vegetarian entrees, meat entrees etc. These categories and sections should be organized in a spreadsheet.
Place Each Item into One of Four Quadrants
- Stars – High profit, high popularity
- Plow-horses – Low profit and high popularity
- Puzzles – High profitability and low popularity
- Dogs – Low profitability and low popularity
Decide What to Do with Items in Each Quadrant
The decisions you make will be a combination of logic, reason, and intuition. But here is a guideline for how you should act against the information you have gathered.
- Stars – Highlight your stars
- Plow Horses – Find ways to create more profit with these offerings
- Puzzles – Figure out why these dishes are not performing and adjust as necessary
- Dogs – Deemphasize or omit these items as needed
Design You Menu
Designing your menu involves highlighting the items you want to sell most by using visual cues such as boxing the text on the menu, picturing the item (informal restaurants only), or placing an asterisk next to it. But use these techniques sparingly as the more they are used the less effective they become and the more distracting your menu.
Do not emphasize price. You want to draw as little attention to the numbers and the thought of money as much as possible. Once your customers are thinking about money, their decisions become logic based, not experiential, which is devastating to your bottom line. Listing prices as single numbers, without dollar symbols, decimals, or columns is ideal.
Use Item Descriptions Effectively
The more you describe an item, the more attention it gets. So be sure to best describe your “stars” while minimizing your “dogs”.
Using Menu Configuration to Your Advantage
The idea here is to maximize user experience and owner control. The two-panel menu, wherever possible is the best configuration to use. It is easy to read, induces the strong feeling of the full dining experience while allowing the owner maximum control over the menu and experience. Fewer pages are less formal and very limiting, while multi-page menus are confusing and overwhelming.
Take Advantage of Eye Movement
The average customer’s eye movement is fairly the same. Here is a diagram that shows the most and least popular spaces of your menu. You want to place your stars in the sections of your menu with the greatest attention and vice versa
Test Your Menu
Once you’ve implemented all your changes, release and execute on them and see what the numbers say. For restaurants that have not formalized the menu engineering process, they should see significant changes to the performance of their menu. But as mentioned earlier, this process is ongoing. And continuing to implement this process and continuing to make your menu and restaurant more effective and efficient in this way will always be a reliable source for increases in profit and revenue.