Most restaurants have been forced to figure out ways to sustain and capitalize from the effects of Covid-19. One of the ways that restaurants do this is through menu engineering, a well-designed menu can promote dishes and boost a restaurant's profitability. Restaurants have managed to adapt to this change, restructure their entire digital menu, promote it on their preferred social media pages and through other online mediums.
According to Gallup Poll , it is said that an average consumer spends around 109 seconds navigating through a restaurant menu. A restaurant's menu is the first impression consumers have, so make this an opportunity to entice your customers and stand out among the competition. Learn how to use menu engineering tactics effectively by, analyzing your profitability, popularity, and through other practices. This would create a fulfilling customer experience while gaining high-profit margins. Which has resulted in restaurants not only succeeding in-house but also thriving online.
What is menu engineering?
Menu engineering might seem like a new concept but it's not. A growth-share matrix model developed by Boston Consulting Group to identify which products should be given more priority was one of the first menu engineering models introduced back in the 1970s. Professor “Coach” Donald Smith of Michigan State University brought this idea to the restaurant industry 10 years later. It is said that menu engineering can increase a restaurant's profitability by 15%. Restaurant menu engineering practices are used to evaluate the profitability and popularity of menu items by analyzing sales data and food expenditures. This is to see how these factors affect where you place food items on your menu. This helps restaurants to consider which meals to promote and to price their food items effectively.
It is said that about 40% of restaurants follow menu engineering but only 10% are doing it effectively. 90% of restaurants have the potential to improve their profitability.
Let's look at the process of menu engineering
Process 1: Costing your menu
This is one of the most important steps in menu engineering. Costing the menu will help you identify your most profitable dishes. Costing a menu is simply known as quantifying all your menu items to their exact cost. In terms of accuracy, one should note down the cost from all ingredients.
Approximately 80% of restaurants do not cost their menus, and another 5% cost their menus improperly. Costing your menu can be highly time-consuming but taking the time to do it right may offer you an advantage over 85% of your competitors.
Process 2: Categorizing menu items according to popularity and profitability
Divide your menu into "sections" and "categories. Usually, a broad list of categories includes appetizers, starters/entrees, desserts, and drinks. Make sure there are no food items that overlap when you're categorizing. Following that, break down and divide your categories into sections. Seafood entrees, vegetarian entrees, beef entrees, and so on can be examples of "Entrees." You can also break down the beverage section as alcoholic and non-alcoholic. Try Using a spreadsheet to arrange these categories and sections easily.
Once you've divided your menu into categories and sections, you should evaluate each menu item based on profitability and popularity to determine what should include and what should be excluded, as well as which items should be relocated to the most popular section of the menu. To make things easier restaurants divide all of their menu options into four quadrants such as (Plow Horses, Stars, Dogs, and Puzzles.)
Stars - high profitability and high popularity
Plow-horses - low profitability and high popularity
Puzzles - high profitability and low popularity
Dogs - low profitability and low popularity
Decide on what to do with the items in each quadrant. You'll make judgments based on a mix of logic, reason, and intuition. Here's how you should use
Stars: Make your stars stand out.
These are winning dishes! They should be kept. You may even consider a little price hike on your next menu update, out of all four categories, these items will have the most impact on your bottom line due to their high popularity and profitability.
Plow Horses: Look for ways to make additional money with these services.
You know how to market these items, but due to their poor profitability, you should consider revising them to increase margin. This can be accomplished by raising the price, changing the ingredients, changing the portion size, or doing all of the above.
Puzzles: Figure out why some items aren't performing and make required adjustments.
Puzzles are the items that you wish you could sell more of since they generate revenue for you. To enhance sales volume, consider promoting, rearranging certain products on the menu, or incorporating them into a campaign. Guests will not order an item if the description on the menu is not tempting enough, so try using appealing food descriptions.
Dogs: De-emphasize or eliminate these components as needed for dogs
f you keep dogs on your menu, you're throwing money away. These must be identified and quickly removed from the menu. Whether it's your chef's special dish or a staff favorite, if your guests aren't ordering it and it's being expensive to prepare, it's time to get rid of it.
Process 3: Designing your menu
Visual Cues
Use visual cues if you wish to highlight your most selling items. Restaurants use visual cues when designing their menu such as, including pictures, placing an asterisk, and boxing out the texts on the menu. However, utilize these methods cautiously. They become less effective and more distracting when used more frequently.
Pricing strategy
Avoid listing your prices on the right side of your food menu down the column. This is a big no, this makes customers give more focus towards the price, not your food. This leads to them ordering a cheaper meal in the column. Try using the same type of font size and style to place pricing two spaces after the end of the item description.
Description strategy
Menu descriptions on your menu are critical for improving customer experience, generating emotion, and establishing long-term customer relationships, they can even trigger an increase in buying decisions by 45%. Ensure your menu descriptions connect to the senses of your customers and appropriately reflect the food's quality. Storytelling should be a part of your cuisine. Create a nostalgic backstory for your menu items that connect with customers and portrays prior events. You'll most likely see a 55% rise in conversion rates. The best menus for attracting guests' attention are those that provide detailed information about their products. So, make sure your descriptions make your visitors crave and look forward to getting their meals.
List order strategy
The sequence in which you list food items is a science. They should be maintained to a minimum in your menu. This is because customers focus on the first few items before moving on to the last few. The items in the center of a list receive less attention. So, try to keep it short in order to improve the proportion of the list that is read.
Process 4: Give training to your staff
Whenever we talk of menu engineering, we usually think of the behind-the-scenes planning that goes into creating a restaurant menu, but a restaurant's staff may also have an impact on what customers buy. They're the ones that engage with visitors on a daily basis. Teach them the menu items to sell, and they'll be able to assist customers in selecting the most profitable dishes.
Process 5: Now it's time to check your restaurant menu
You'll be geared up to Test your menu after you have recorded, analyzed, and constructed your new menu. Restaurants use a method called split testing.
Split testing is what transforms a respectable marketing campaign right into a top-notch one. Split testing a menu entails making minor changes to the menu and comparing it to a prior version. Changes that enhanced profitability or sales are kept, while those that had a negative impact are discarded. These small adjustments may indeed build up to large profit increases over time.
Menu engineering is an ongoing project continuous process. Which is not a one-time event ingredients become more costly as time passes, culinary trends come and go, and customer tastes vary from time to time. Therefore, maximum profitability in a restaurant is a shifting target, but it's not impossible to achieve. You'll create bottom-line profit faster than any other campaign if you let your menu work for you, and you'll spare your whole staff from future frustration.
It's time you put all these learnings into work. Try out an Applova Free Digital Menu to create, customize and update your digital menu in minutes. Customize your branding to reflect your restaurant's tone and style, swap backgrounds, select color themes, and even upload your own logo.
Add, remove and organize products and categories with ease. You can also add and edit product descriptions and upload images of each dish or beverage. Applova's dynamic QR code also allows for limitless, real-time price updates and menu item availability or substitutions, so your customers will always have access to accurate and current information.
Applova Free Digital Menu is FREE FOREVER. So, what are you waiting for? Entice your customers with a well-engineered QR Menu to bolster sales turnover, increase customer engagement and go next-level digital!
Check out a sample menu here and sign up now!