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Introduction
Youve all seen the headlines.
The Science of Menu Engineering.
The Psychology of Menu Design.
How to Make your Menu Work Smart, Not Hard.
Its a fact: Menu engineering is the latest restaurant industry buzzword. Most people
know it involves analyzing restaurant sales data. Most people know it has to do with
placing menu items where theyll stand out.
However, most people dont know where to start. Or, more accurately, they dont
make time to start. But every second you dont look at your menu prices, food costs,
and contribution margins, you lose money on your best menu items.
The Menu Engineering Bootcamp will give you a regimen to follow as you engineer
your menu to increase restaurant sales. From day one, youll have actionable lessons,
takeaways, and assignments to follow. By the end of the 30-day course, youll have an
optimized menu, the menu engineering worksheets you need to track your success,
and a better idea of menu statistics to follow for years to come.
I know youre eager to get started, but before you do, I recommend printing out this
PDF, especially the following page, which has a calendar to follow on your journey.
Cross off the days as you go along, and let each lesson and assignment sink in before
moving on to the next one.
Lets get started!
Lesson 1:
Open an Investigation Into Your Menu
Restaurant data is your friend.
Before you start thinking about stars or dogs -- whatever those are -- you need
to delve into the nitty-gritty details of your menu with a comprehensive food cost
analysis.
In this lesson, youll learn how to calculate:
contribution margin
For example, say you have two menu items: a sirloin steak for $20 that costs you $10 and a pizza for $10 that costs you
$3. The food cost percentage is 50% for the steak and 30% for the pizza. However, the contribution margin for the steak
is $10 compared to $7 for the pizza. So it seems like youre making more money on the steak, although the item could be
priced higher to net you even more. Neither metric is solely indicative of restaurant success, but examined together, they
can be used to make important business decisions.
Menu Item
Popularity
Assignment
TO DO: Use the next few days to dig deep into your restaurant data. Look out for growing trends
to get ready for the next lesson.
1.
2.
Whats the difference between food cost percentage and contribution margin?
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3.
4.
5.
What are growing trends, if any, that you see in the data before you?
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Popularity
Youve done a food cost analysis. If youre tired of staring at numbers, dont worry;
now, its time to visualize your restaurant sales. Create a scatter plot graph with your
menu items contribution margin and menu item popularity using data from a certain
time period, such as this past quarter.
Plowhorses
Stars
Dogs
Puzzles
Profitability
After creating this graph, with your spreadsheet, you should be able to draw a trend
line through these items to determine whether youre trending towards dogs, puzzles,
stars, or plowhorses. Lets look at each of these menu items individually to learn how
to optimize them.
Assignment
TO DO: Make your own scatter plot graph with these tips. What trends do you see? Are you
already getting ideas for how to improve your menu? Next week will be a quick lesson in menu
psychology, so you can learn some of the best strategies for optimizing your best menu items.
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2.
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4.
5.
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2. Decoy Effect
The decoy effect is a psychological phenomenon that says guests are more
likely to change their preference between two options when a third, less
appealing option, is introduced to show the value of the most expensive
option.
According to Dan Ariely, the decoy effect really works. He ran a study on
100 MIT students, asking them which newspaper subscription they would
buy the combo deal (digital and print), the more expensive deal (print), or
the less expensive deal (digital). When all three options were present, they
chose the combo deal. But when he removed the redundant option (the print
subscription), they preferred the cheaper choice. The print subscription acted
as a decoy, giving guests a frame of reference for just how good the combo deal
was, and enticed them to pay more.
Do This: If youre looking to increase sales of a particular menu item, you might
want to show its pricing against other items. It could help increase the sales
on the item you ultimately want guests to order, especially for those who are
price-sensitive. Try bundling items together so guests see obvious results; for
example, fries $5, hamburger $10, hamburger and fries $10.
3. Social Proof
Social proof is the theory that people will adopt the beliefs or actions of a group
of people they like or trust. Its the me too effect.
Do This: This is an easy win on your menu. As well as including pictures of
your food, why not also include quotes from customers or family members?
Show why people love the item. You may also want to encourage customers to
write an honest review of your restaurant or a particular menu item on Yelp or
Facebook.
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4. Semantic Salience
Semantics refers to the relationship between signs and symbols and their meaning(s).
Salience, however, is the relative conspicuousness of something in a given situation.
So when were talking about semantic salience, were referring to how noticeable (and
potentially important) a symbols meaning is to a specific situation or decision-making
process.
Do This: In menu design, this can apply specifically to pricing. Its not about what the
menu items actually cost, but rather how theyre presented to the guest. Consider
how symbols affect your menu price presentation. Here are a few ways to think about
displaying prices:
$14.00
$14
14.00
14
fourteen dollars
The dollar sign makes the price more conspicuous, adding salience. While all of these
prices are indisputably equal amounts, they differ in saliency. A dollar sign tends to
be associated with having to pay, and having to pay tends to be associated with losing
money, which is never someones first option.
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Assignment
TO DO: Take your current menu, place it next to you, and stare at it. Are your stars and puzzles
highlighted? What about your menu prices? How do you scan it; how does your business partner
scan it? What ideas do you have for the future design?
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1.
How can you highlight your puzzles to turn them into stars?
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2.
What is the decoy effect, and how can you apply it to your menu items?
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What is the me too effect and how can you apply it to your menu items?
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How many menu items should be in each category to address paradox of choice?
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Assignment
TO DO: Keep all of this in mind and start designing! Or, give this guide to a menu designer you
know. Also give them an updated list of prices, your #1 star with directions to emphasize it, and a
list of your puzzles with directions to emphasize them. Make sure your menu designer gives you a
proof, or mock-up, of the menu design so you can approve it before it goes live. Notice any of the
gaffes above? Return the menu for another draft until its perfect.
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2.
What are some ways you can accidentally over-design your menu?
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3.
What are some examples of upsell opportunities you can include on your menu?
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Assignment
TO DO: Keep an eye on your restaurant metrics, and bookmark this course for next quarter (or
half-year, or year, etc.) Congratulations, you did it!
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3.
What metrics should you look at when comparing different time periods?
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5.
How has your menu evolved over the course of this course?
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Conclusion
Toast Restaurant POS has the advanced functionality you need to dig deep into your restaurant
metrics, automating sales, labor costs, food costs, and so much more.
Get to know your couch better with Toast POS; sign up for a demo today.
Whip Your
Menu into
Shape.
Schedule Your Demo Today
pos.toasttab.com/demo