The secret art of raising restaurant profits

By Georgia Ward

You pick up a menu, have a scan of the available dishes, narrow these down to a couple that take your fancy, and place your order. But are you really in control of what you have chosen?

Menu engineering – the study of popularity and profitability for menu items – is the restaurant marketer’s heralded tool that can be used to influence how customers experience a menu. This originated in work done in 1970 by the Boston Consulting Group to segment products to make analysis and decisions more simplistic for businesses, and was later applied to the restaurant industry in the 80s by Professor ‘Coach’ Donald Smith, Michigan State University.
A mix of psychology, managerial accounting, marketing strategy, and graphic design studies contribute to menu engineering, with the aim of increasing profitability. Here are our top tips to make the most out of your menu:

Specials

Adding new dishes can be risky; purchasing new ingredients and committing to a space on menus that get reprinted seasonally may put you in a sticky situation should the item prove unpopular, or unprofitable. Beat this dilemma by initially offering any proposed new dishes as specials, or exclusive featured dishes. This should give you a better idea of how viable a new addition is before you go full steam ahead.

Highlights

Where dishes are positioned on your menu makes much more of a difference than most people think. Using ‘callouts’, highlighted boxes, or other attention grabbing symbols can draw customers to dishes you have purposefully chosen. Often, these dishes sell above average and so best practice would be to ensure profitable options hold these positions.

Pricing

Customer behaviour tells us that people are very conscious of the price of their decisions when eating out. To combat this, avoid an increasing price list, as customers will automatically keep to the top items away from pricier options. In addition, removing the currency symbol can also take away subconscious reminders about price.

Category Quantity

Research has proven that limiting the items per sub section of a menu to no more than seven options is the most effective. Any more and customers are overwhelmed, any fewer and they feel constrained.

Arrangement

Don’t fall into the trap of writing out your menu list based on the price of each item, alphabetical sorting, or the length of time they have been offered for. Psychology of customers’ reading patterns shows us that the top and bottom options within a column will be the highest selling items. Take advantage of this by placing key profitable dishes here, not your most popular!

Menu engineering is an ever-evolving study which works best when it is accurately applied against informed sales data, uses great graphic design elements, and is continually reviewed for any further improvements by capable marketers.

As seen in Curious.