INDUSTRY INSIGHTS

Menu Engineering & What That ACTUALLY Means

If menus could think I would say 98% of them are experiencing an existential crisis on a regular basis. Why? Because most menus don’t serve a greater purpose beyond being a piece of paper (or now, a pdf forced into a website) with a bunch of gobbledy-gook words. We must give our menus a greater purpose; after all, damn near every guest that sets foot in your establishment is going to interact with the menu in some way, shape or form. How do you achieve this purpose? Through menu engineering.

Menu engineering is the practice of using science-backed methods to design, organize, and otherwise construct a menu to achieve revenue, profit, and cost goals in your establishment.

When engineering a menu, I’m not building the actual dishes and cocktails for you; that’s why you hired chefs and bartenders. I am, however, taking those offerings and conveying them in a revenue-positive manner. At the end of the day, your menu should not only represent your company through brand standards and voice, but it should also consider the dollars behind each dish and the goals of the restaurant/bar as a whole. There are four factors every operator should keep in mind when engineering a menu: pricing, placement, design, and behavior.

Pricing Strategies

Pricing strategies go beyond your standard industry mark-up or cost percent. When pricing a menu, the competition, the value of the product to the end consumer, profits, and cost should all be considered. Further, a pricing strategy doesn’t (shouldn’t) be a blanket formula utilized across the entire menu. It should vary based on the product type, menu section, and restaurant revenue/profit goals.

Placement Strategies

Placement is just that, strategically placing menu items to take advantage of the natural pattern in which people read menus. Studies have researched the various patterns in which the eye travels around a menu, and sections it tends to focus on. This applies to both physical and digital menus. One of the most read sections of a menus is the top; use this sweet spot to your advantage by placing either high-profit items or items you want to push to positively impact your revenue and bottom line.

Congruently, we can use the above two strategies in conjunction with one another to generate an even more profound method to achieve our goals. We can change value perception by strategically placing a more expensive item next to the item we want to push. This is a tool retail stores often utilize, and it works just as well when applied to a menu.

Design Strategies

Great design utilizes visual elements to emphasize or de-emphasize products. Call-out boxes and starbursts are a common design strategy that typically yield positive results. More so than price and placement, design needs to follow brand standards to create a cohesive presentation. A word of caution — use design strategies sparingly. Too many callouts create a scenario where they are no longer call-outs. They end up becoming ‘regular’ menu items.

Behavior Strategies

Within this bucket I use a variety of researched ‘User Experience Laws’ to assist the menu viewer. Hick’s Law, for example, states that the more choices, and more complex options you present to your readers, the longer it will take them to reach a decision. This seems like common sense, but it often gets overlooked. Additionally, adding photos has been proven to increase a guest’s likeliness to order (view Iowa State University’s study here). You may not have space on a menu for photos, but if you’re running a promo, I highly suggest a professional photoshoot and marketing collateral to really sell that item(s).

The above gives you a small snapshot of the opportunities in which you can actively increase your sales using your most valuable marketing tool…your menu. You can explore more about menu strategies through an actual case study.

As the age-old saying goes “work smarter, not harder.” You can effortlessly achieve revenue goals by utilizing the menu to your advantage. Give your menu a purpose. Allow it to serve you and your team – I promise you won’t regret it.

Need help with your menu? We’re here whether you need a few tweaks, a complete re-do, or a brand new menu for your opening restaurant or bar.

Email us here

Focus on the Profit Dollars Not the Percent

“Money makes the world go ‘round.”

Gone are the days of bartering goods and services for more goods and services. Here to stay is the methodology of exchanging money for goods and services. While we all know this to be true, the hospitality industry continues to focus its energy on the archaic idea that cost percent should be used to price menu items versus actual dollars. I believe Liza Minnelli was right when she said that “money does make the world go ‘round.” So, if that holds true, why do we continue the outdated practice of pricing our menu items with percentages?

As industry veterans, we’ve been trained throughout our careers to uphold certain standards, more specifically (here’s looking at you corporate restaurants) cost percent. The ambiguous ‘They’ have decided that, for whatever reason, 25% — 30% food cost, 33% wine cost, or whatever arbitrary number you’ve come across is what you need to be successful. I encourage us all to let go of this ideal and discover that while cost percents are a great tool to measure and maintain within a healthy range, we’re missing the growth potential that comes from measuring success based on profit dollars.

Here’s an example:

You own a simple sports bar that focuses on beer as a main beverage offering, pricing your menu based on a 30% cost goal for beer.

Domestic beer by the can typically costs $1 to obtain. With a 30% beverage cost formula, you sell your generic domestic beer for $3 (we rounded down for efficiency). With each sale, $2 in profit per can is yours to bank at the end of the day. Not a bad, but could it be better?

What if you purchased a premium craft beer (the one you want that fits your concept) at $3 a can? With the 30% beverage cost formula, you would have to sell it at $10 per can, which in this case is too expensive for your concept. Instead, you decide to sell it at $7.00 per can, bringing you to a 43% beverage cost and $4.00 in profit per can. By breaking the cost-percent industry standard, we have now doubled our profit dollars with a single can of beer.

You may argue that you’ll sell more of the domestic than the craft. I’ll counter this by referencing the practice of selling a bottle of wine versus trying to sell four glasses. With the bottle sale, I’ve locked my customer into paying that set dollar amount versus crossing my fingers and hoping I’ll sell four glasses all day. In my experience, this doesn’t usually happen. In this example case, my sale of one can of craft beer is the same profit dollar equivalent as two domestic beer can sales.

So now I ask, if you can only sell your customer one can of beer, which can would you choose: the generic domestic or the premium craft?

Still skeptical? I challenge you to run the numbers. Take a moment to truly analyze your business and make sure your gut agrees with the facts. Of course, there will always be exceptions, but I implore you to explore the idea that cost percents are not the end-all-be-all and discover the satisfaction of making more money by focusing on profit dollars.


The Value Perception of Food Based On Portion Size, Plate Size & Price

While Stratecute founder, Channing Fawcett, was studying at the University of Houston for her Masters in Science in Hotel and Restaurant Management, she opted to write a thesis the explored how individuals value food based on three elements: the size of the portion, the size of the plate, and the price associated with the before mentioned variables. The study was conducted at the University of Houston.

ABSTRACT

Multiple studies reported that the average weight of Americans has increased steadily over the past 20 years due to a decrease in physical activity, an increase in portion sizes and the perceived value of a restaurant meal. This study examined a restaurant customer’s perceived value of a serving of lasagna based upon portion size and plate size.  A survey was used to conduct this quasi-experimental design. Two hundred volunteers were recruited to participate in this study in 2012.  An 8-ounce portion represented a small portion whereas 15.5-ounce portion represented a large portion.  Additional variables included, two plate sizes (8-inch and 10.5-inch), and two prices, $9.83 and $11.99, respectively.  SPSS was used to conduct one-way ANOVA tests and descriptive statistics to analyze the data.  It was hypothesized that there would be a statistical significance between the variables.  Participants identified each of the large and small plate sizes appropriately regardless of portion size with one exception.  Value perception was found to have no significant difference between plate size nor portion size, therefore restaurants could potentially serve smaller portions at higher prices.  Participants accurately identified the size of the portion regardless of the plate size.

Fill out the form below to receive the full thesis write up.


3 Tips to Running A Restaurant During The Coronavirus Pandemic

This virus has hit us all by surprise and has the majority of businesses, not just the restaurant industry, asking what to do, how to do it, when to do it. Our goal today is to provide you with a quick checklist of items that should be productive for yourself, your employees, and your business.

Reset the Restaurant

With decreased attendance in your business this is the perfect opportunity to deep clean the restaurant and organize those things you keep ‘meaning to get to.’

We all know that age-old saying ‘if you can lean you can clean.’ Well, we suggest you get to it. With fewer people in your building and fewer guests to distract take this time to reset yourself. Organize the service station you’ve been talking about, clean your office desk – organize your tastings notes, etc.

Take this time to train the staff on verbiage, guest experience, wine selling tactics, etc.

Further, typically the first thing everyone wants to do in a crisis is cut costs. This is not a bad tactic, and now you have the time to do it. Can you renegotiate your suppliers? Are there things you are paying for that you use only once every 6 months? Get rid of them. This will not only help you now, but it will help in running the business in general.

Delivery & To-Go

The general public has already decreased how much time they are spending in restaurants this week. Take a moment to develop a to-go or delivery menu that’s simple, streamlined, and easy to execute. Focus on foods and dishes that generate a good profit AND don’t forget beverages!

Suggest exploring some easy mocktails that consumers can enjoy in their homes OR cocktails in which they can simply add their own alcohol.

Promote Gift Card Sales

While people are dramatically decreasing their spending right now (or rather reallocating to grocery stores), there will be a significant upswing when people/warnings, and the like calm down to a degree. There is only so long people can be ‘comfortably’ stuck in their homes, and when they go out they will be REALLY ready.

We suggest offering an online gift card promo, allowing consumers to purchase gift cards online and print at home, while also offering a ‘kickback.’

  • $20 gift card for yourself, when you buy a $100 gift is one example.

If you need help with your strategy, building a to-go menu, designing cocktails, or restructuring your restaurant layout to be more efficient contact us directly at:

cfawcett@stratecutemarketing.com

720.601.3911


MENU MAKEOVER

I’d like to start this first blog post by saying hi. Let me introduce not only myself but my business and the inspiration to write this said blog post; my company is Stratecute, pronounced strat-i-kyoot, a company focused on marketing and logistics for hospitality-based businesses, ie. restaurants, bars, hotels, distributors, retailers, etc. The name, Stratecute, is a combination of both the words strategy and execution, two things I believe are most important to building a strong program or business – but more on that another time.

Me? I’m a thirteen plus-year veteran of the restaurant and hospitality business searching for people that can use my brains and know-how to make them more successful with their alcohol and food-based businesses, whether they already exist or in the planning stages. So, now that we’re acquainted, let’s move on to our topic of discussion…menus.

Before I sat down to write this blog post (the first-ever in my entire life) I had to ask myself, what are the biggest problems that restaurant/bar and hotel owners face? With a quick search, menus seemed like the obvious winner…outside of capital and sanity of course.

As someone who has spent her life in restaurants, both working in, managing and sitting on the fun side of the bar, I have to agree. Menus are the main marketing component for any entity, after all, people are generally visiting an establishment to eat and drink. I know we just met, but I have to admit, I’m a menu collector…I may or may not have a box of menus I’ve requisitioned from a variety of establishments. So, in honor of my first blog post, and our topic, which happens to be one of my favorites, I’ve created a list of do’s and don’ts to make your menu the best possible:

Font Size – This is a big one, especially given the fact that the whole point of a menu is to be able to read it. I implore you, just as a chef should sit down and eat his/her food, we should be sitting down to read our menus in the same lighting as the guest. This is the best way to make sure your font is not too small to read, and if you’re questioning it, it’s probably too small. To avoid making the font too small, considering decreasing the total word count, or adjusting your letter or letter spacing.

Don’t Use Dollar Signs – Cornell University published a study in 2009 that proved that patrons presented with a menu contain dollars signs spent less money than patrons presented with menus that did not contain dollar signs ($ or Dollars, Yang et. al., 2009). My $1,000,000 advice to you, is to lose the $.

Descriptions – While I am a minimalist in most aspects of my life, studies show otherwise for menu descriptions. The right, crafted descriptions give the perception, real or otherwise, that this menu item can’t be reproduced at home and therefore it’s worth it, aka more value for the guest (The Effects of Restaurant Menu Item Descriptions on Perceptions of Quality, Price, and Purchase Intent, M. McCall, 2008)

This article by Katie Schenke outlines a few other tips for menu descriptions: https://www.rewardsnetwork.com/blog/menu-descriptions-matter/

Sweet & Sour  – While the sweet spot for menu placement is debated, it was determined that the least reviewed area of the menu is the bottom left corner. As a result, maybe the item that produces the least amount of profit dollars should be placed here?

Branding  – As noted previously, your menu is probably the most important marketing tool for your guests, as a result, don’t forget to include your brand/brand elements. Utilize a brand style guide to be consistent with font types, styles, colors, imagery, language, etc. Don’t have one of these said brand style guides, you can email us directly and we’ll get you squared away. The point of branding is to have a guest recognize your brand in the blink of an eye (and associate positive feelings with your brand). Use your menu as a tool to convey your concept, and the experience you want people to take away after they’ve dined in your establishment.

Get Creative – In a world full of competition, it pays to stand out, and as mentioned previously your menu is THE marketing tool for guests, so I encourage you to be creative, like the restaurants here (https://www.image3d.com/corporate/blog/2012/business-reels/restaurant-menu-reels/) that decided to use an old-school view master to showcase their menus. The point of a hospitality business is to not only to feed and drink people but to also provide them with an experience, why not do this with your menu?

Hopefully, you read this post in its entirety, finding it somewhat thought-provoking and challenging. With that in mind, I would like to challenge you; I challenge you to test the theories I’ve listed above. Develop a new menu (in all your spare time…I know, I know), and see how the items sell based on the tactics I’ve outlined above. And, if time gets the best of you, well, that’s what I am here for. If your creative juices just aren’t quite there, because they’re caught behind dollar signs, that’s what I am here for. Reach out to us at cfawcett@stratecutemarketing.com for more menu strategy ideas, quotes, or questions or click the button below to contact us.

I’ve outlined one of our recent menu re-designs/layouts in the images below. The goal was to assist the restaurant with food and beverage sales, as well as improve their overall beverage execution logistics. The result was an easier-to-read menu with a product-driven purpose, better logistics for all FOH staff, and a three times increase in sales.

Tokio – a sushi and ramen restaurant in downtown Denver, Colorado. The new menu design was executed in Word. Tokio requested to maintain their menu in Word so they could continue to edit the menu themselves, as opposed to the traditional menu design programs *insert relevant adobe suite program here.*

Additionally, we kept the overall size and watermark design to avoid changing things too drastically for both the restaurant and its’ guests.


As our blog relationship continues, you’ll find I’m very scientifically minded. I love researching, reading, and reviewing any ideas and theories. If you’ve got something juicy, send it my way. Let’s chat about the next big thing, controversial, or new, or even old, to the hospitality industry.

 Sources:

  • 1$ or Dollars: Effects of Menu-price Formats on Restaurant Checks, S. Yang, S. Kimes Ph.D., M. Sessarego, Cornell University, 2009
  • 2The Effects of Restaurant Menu Item Descriptions on Perceptions of Quality, Price, and Purchase Intent, M. McCall, 2008
  • 3Eye Movements on Restaurant Menus: A Revisitation on Gaze Motion and Consumer Scanpaths, S. Yang, Cornell University,

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