How do you know what items to add, remove or tweak on your menu? Sure, a gut shot isn’t as bad in our industry as it is in, say, the airline biz, but it’s still a gut shot, and it will never be more.
It’s always been incredibly important but having a firm grasp on your menu and its performance nowadays could mean the difference between life or death for your business.
Menu engineering sounds complicated, as do most things engineering, but it really comes down to just a couple things – adjusting your menu’s content based on profitability and popularity and understanding the basic rules of where to place items on your menu to ensure they are seen.
In this episode, we will tell you how to get there, and stay there…with ease.
What is Menu Engineering?
- Menu engineering is the process of designing your menu to ensure maximum profitability.
- There is a technical business aspect to menu engineering as well as a psychological facet.
- Technical: Costing, organizing and categorizing your menu and its items for like-item comparison utilizing gross profit and popularity as the axes.
- Psychological: Strategically placing items at particular locations on the menu to manipulate the diners’ choices based on business needs/desires.
Why is it important?
Menu engineering has long been used in the hospitality business to ensure that an operation is leveraging the popularity of menu items to reap optimum profits. Typically speaking, the adoption of a spreadsheet aids in calculations that compare the cross section of a dish’s appeal and its contribution to the bottom line.
The spreadsheet will then classify your menu items into 4 different quadrants:
- Star – high profit; high popularity – this dish does not need tweaked – let it shine!
- Plowhorse – low profit; high popularity – These menu items are the backbone of your menu – raising the price may turn them into stars – take a look!
- Challenge – high profit; low popularity – could be a star, could be a dog…all we know is something needs changed on this kind of dish!
- Dog – Low profit; low popularity – without drastic changes this dish needs to be 86’d permanently…it’s just clogging up your systems.
Ultimately, this methodology relies on data, and data alone, to support decision-making on the operator’s behalf. We live in a very emotional business where emotional decisions are made all day, every day. Unfortunately, emotion can steer us wrong as it spurs many biases. Data does not lie nor does it bear bias, so by taking the emotion out it, operators are more prone to making pragmatic, hard-boiled business decisions that are founded on fact, not feeling.
In today’s restaurant climate, arguably the biggest menu trend going is shrinkage. Reducing the size of a menu streamlines all processes menu from inventory to ordering to receiving to stocking to prepping to serving. Further, the smaller the menu, the smaller the staff needed to execute it.
So, how does one go about deciding which menu items will not make the cut in their quest for simplicity and efficiency? One thing is for sure, if you follow your heart on this you may be missing the mark drastically.
Stick to the data – it doesn’t lie!
For the psychological piece, it is imperative that the operator knows exactly what each dish brings to the table so to speak (see what I did there?).
Once the profitability and popularity of the dishes are known, the dogs have been cut and the challenges have been tweaked, the operator then needs to decide where to put the items on the menu to either sustain or increase sales volume.
Some folks who are way smarter than us, have done tremendous research on the matter and developed the concept of the Golden Triangle. This theory states that we generally look to the middle of a menu first, then the top right corner followed by the top left.
Strategically placing the Stars at these locations increases probability of them being ordered. Along with this come some other tricks, too. Clever use of brackets, boxes, highlights and bolds helps with dishes grabbing the diner’s attention as well!
These moves aid in the guest ordering the most popular, or satisfying dishes, and in the operator maximizing gross profit per sale – everyone wins!
A quick guide with more thoughts: Menu Engineering Psychology