Did you know that the design of your menu actually has a direct impact on your restaurant’s bottom line? While menu price and menu items mature, the layout of the menu actually has a role to play in your profitability as well. When your menu draws attention to your restaurant’s most profitable items, you sell more of those items and see greater revenue. By understanding the principles of psychology and their impact on how customers choose what to order when reading a menu, you can design a profitable menu layout that points your guests to your most profitable items. Here’s how you can do it.
What Is Menu Engineering?
The key to a profitable menu is understanding menu engineering. This is the practice of creating a strategic menu design that makes your restaurant more profitable. Using the design of the menu, you draw attention to popular and profitable items. This way, each order brings in the highest potential revenue while also helping customers feel satisfied with their dining experience.
This design tactic is actually quite successful, and it is important because customers don't spend long looking at a menu before making their order choices. In fact, one poll shows that the average customer spends just 109 seconds scanning a menu before deciding what to order, so design matters. You must grab attention and pull it toward the proper items as quickly as possible. Carefully designing your menu can increase your sales by as much as 10%, making menu engineering something worth spending a little bit of time on.
Remember, the goal of menu engineering is to draw attention to profitable items. Thus, in order to design a successful menu, you need to know both the principles of design and the items that are most profitable for your restaurant. Whether you are trying to improve an existing restaurant's profitability or are setting up a new restaurant and designing its first menu, menu engineering is key.
Menu Engineering in a Nutshell
Menu engineering helps your restaurant in several ways. By spending some time on the restaurant menu’s design, you can:
Eliminate poor-performing items from your menu to optimize your costs
Highlight the most profitable menu items to sell more of them
Create a system for analyzing your menu and keeping it optimized to boost profits
Optimize menu descriptions to sell more of your most profitable items
Create a new menu that makes your business more profitable
Each of these adds up to higher profits for your restaurant.
How to Engineer Your Menu in 5 Easy Steps
When you understand some basic psychology and know your restaurant’s most profitable menu items, tweaking your menu so that it is as effective as possible is not difficult. With these five steps, restaurateurs can maximize their menus to see the greatest potential results.
Step 1: Select a Time Frame (Annual vs. Seasonal)
First, decide on the time period you want the restaurant’s menu to be live. Sometimes you plan your menu for the entire year, and your menu design needs to last until your next annual review. However, some restaurant operators find that seasonal menus or seasonal menu items can create more interest and draw more people into the restaurant. Their seasonal menu changes allow them to adjust the menu layout based on the changing needs of their restaurant. Neither choice is better than the other, so determine if you want to have an annual menu or a seasonal menu.
If you use local produce for your menu, then a seasonal menu makes sense because you can change up your menu based on the seasonal produce availability. You may decide to add seasonal items based on upcoming holidays or local events to capitalize on your customer’s unique interests during that particular season. For example, a Christmas menu may include peppermint desserts, while spring and summer menus may be filled with berry salads and fresh, light dishes.
If you have a seasonal menu of sorts, the time when you change the menu is a good time to revisit your menu design. Seasonal or annual adjustments to your menu also give you the chance to change your pricing, as food ingredient pricing changes. It also lets you remove redundant or poor-selling items. The time frame in which you review your menu is unique to your restaurant, but establish an ongoing time period so that you know you are reviewing it at regular intervals.
Step 2: Price Out Your Menu Offerings
In order to make your menu profitable, you need to know how much each menu item costs to make so you can determine your profitability. This requires three metrics: food cost per serving, contribution margin, and item popularity. Keeping careful track of your costs and your customer’s ordering habits will help you gather these metrics. Your restaurant’s POS system should make this data available to you, which makes it easier to price out menu offerings.
How to Calculate Food Cost Per Serving
First, you need to determine how much your menu items cost per serving. To do this, list out all the ingredients in the dish, with the amount you need for each item. Don’t forget seasonings and garnishes. Then, use this formula:
Cost per serving = Total cost of ingredients for one serving
Let’s imagine you are pricing your chicken sandwich. You purchase a bulk package of chicken patties for $46, and it contains 23 chicken patties. This makes them $2 apiece. The other ingredients in the sandwich are your house sauce, one cheese slice, two slices of tomato, one leaf of lettuce, and one bun. The cost for each of these is:
Chicken patty: $2
Add these up and the total cost for making the sandwich is $3.20.
How to Calculate Contribution Margin
Next, you need to calculate the contribution margin. This is the profitability of the menu item for your restaurant. Use this formula:
Contribution margin = Sales price - Food cost per serving
So, if you sell that chicken sandwich for $6, then you would subtract $3.20 from the price for a contribution margin of $2.80. The higher the contribution margin, the more profitable the menu item is. If you need to increase the contribution margin, you either need to increase the selling price or decrease the cost per serving.
Remember: Monitor Popular Menu Items
The last metric you need for effective menu engineering is item popularity. If your POS system tracks customer orders, you can see which menu items you sold the most of over a designated time period. Find out which items are the most popular, as this will help you with your menu redesign.
Step 3: Identify Your Most Popular (and Profitable) Menu Items
Identifying your most popular menu items is important, but you have to take this metric a step further if you want to design a profitable menu layout. A popular menu item with a low contribution margin is not helping your business much, while a menu item with low popularity and a high contribution margin doesn’t help much either because you aren’t selling much of that item.
Plowhorses: Low Profitability, High Popularity
Some menu items you can classify as “plowhorses.” These have high popularity, which means people love to buy them, but they don’t have a high contribution margin. Because people love these items, you don’t want to eliminate them. Consider changing the portion size or the price to make them more profitable, and keep them on your menu.
Puzzles: High Profitability, Low Popularity
These are the items that have a good profit margin, but they don’t catch your customers’ eyes. Because these bring in a lot of money, you may not want to eliminate them. However, you can use your menu design to make them more prominent in the hopes that their profitability will increase.
Stars: High Profitability, High Popularity
These are your star players on your menu. People love them, and you get a lot of revenue from them. Keep them in a prominent position on your menu.
Duds: Low Profitability, Low Popularity
If you want to eliminate menu items, start with the duds. These are the items that people don’t order often and that have low profitability. If you want to keep them on the menu, you need to adjust the ingredients, pricing, or portion size to make them more profitable — or you need to find a way to get more people to order them.
Step 4: Update Your Menu Design and Layout
Now that you’re armed with the right data about which menu items are the most popular and profitable, you are ready to start designing your menu. Here are some ideas you can use to apply this qualitative and quantitative data to design a menu that works better for your business.
Choose a Panel Layout for Your Menu
The number of panels your menu has is a key factor in its design. The panel layout you choose will depend on the number of menu items you have and how much control you want over the menu’s design. Some popular options include:
One panel: A one-panel menu is one page, often front and back. It is streamlined and simple and makes the decision-making process easy for your customers.
Two panels: Two-panel designs are the most common. These open up like a book and are easy for customers to read, but without making them feel like they are in a quick-service restaurant.
Three panels: These are more challenging for guests to read, but work well if your menu items won’t fit on a two-panel spread.
Many panels: When you add more than three panels, you will have less control over menu design and the decision-making process your customer goes through.
Digital or QR Code Menus: Many restaurants are ditching the paper menu in favor of a digital option to reduce contact points. A digital menu does not have panels, and you will need to use a different strategy to draw attention to your best menu options for digital or online menus.
As you consider your menu layout, consider the studies that have been done on customer eye movements and tracking eye movements. The most recent studies find that people read menus like they read a book, starting at the top left and reading carefully until they find what they want.
Another strategy to consider is using the “golden triangle.” This refers to three areas on a menu that are going to get the most attention: the top right, top left, and center. Place your most important items or most profitable items in these three spots to ensure they are seen.
Remember, people are most likely going to order what they see first, so place prominent items where people are likely to look first. Alternatively, consider placing high-profitability items, like appetizers, in these areas to encourage more of these items to sell.
Appeal to the Customer With Eye-Catching Descriptions
Another way you can draw attention to the right items in your menu is through menu descriptions. Use descriptive adjectives to help the reader picture and even smell the item in their mind, but be careful not to make it too long. Focus on the freshness, smell, and feel of the ingredients, or tell the reader how the chef prepares it using words like “grilled” or “seared.” Menu readers have short attention spans, so tell them what they need to know in as little room as possible.
Highlight Your Top-Performing Menu Items
Since you’ve taken the time to identify your stars and puzzles, draw attention to these. Use icons, images, bold print, and even the layout itself to bring attention to these profitable items. Ideas that can draw attention include:
Outlines and boxes
Bold or italicized print
Splashes of color
Photo of the item
Use a “less is more” approach here, because too many photos or graphics will hinder your goal — drawing attention to your profitable menu items, and away from the duds.
Curate Your Menu to Avoid Customer Indecisiveness and FOMO
The burden of choice is heavy on customers reading a menu. Many fear making a poor choice and spending their money on food they don’t enjoy. If you give them too many choices, you make this problem worse and they will struggle to make a decision. They may even feel disappointed because they fear missing out on another better dish. FOMO (fear of missing out) may lead to dissatisfied customers, and you never want someone to leave your restaurant feeling like they had a poor experience. Your menu design can help with all of this.
One option is to split your breakfast, lunch, and dinner options into separate menus based on the time someone comes in to eat. You can also refine your menu by removing duds to focus on your popular and profitable items.
Keep Your Staff in the Loop
Don’t forget about the role your staff plays in menu selection. Menu design is vital, but so is the way your staff helps customers select items when they come to your restaurant. If you redesign your menu, bring your staff on board to explain why and how they can use the new menu to promote the right items.
When you have particular menu items you want to promote, let your staff know. They can direct customers to those items by pointing them out when they hand out the menu. They can encourage upselling by asking leading questions that encourage customers to add drinks or desserts to their orders. Remember, your staff are the face of your restaurant business, so make sure they are working with your menu design — not against it.
Step 5: Track Your Results
Once you launch your new menu, make sure it’s working. Continue to measure menu item popularity and profitability to ensure your menu engineering choices are getting the results you want. How can you do this? Check your POS system to gather data about what items are selling and what selling prices they are getting. Use this data to continue tweaking your menu to ensure the design is working as well as it can to make increase your restaurant profits.
The Psychology of Menu Engineering
The science of menu psychology is quite fascinating. As you enter the menu engineering process, you should have some knowledge about the psychology behind it and how it affects what people buy.
There are many different psychological techniques to employ to make your menu work for you. For example, you can add decoy items near your more profitable items. Decoy items are undesirable or highly expensive items that people aren’t likely to buy. They will look past these decoys, see the more profitable item, and be more likely to buy that item instead.
Another technique is to consider how you price your item. Something priced at $10.95 feels like more of a deal than something priced at $11, even though the difference in item profitability is minimal. Yet, pricing the item at $10.99 will hurt its sales, because this evokes feelings of cheapness in many diners.
While there are many psychological techniques you can employ, some of the most powerful include these:
Currency Symbols: Don’t put dollar signs on your menu. This just reminds the diner that they are spending money and makes them likely to spend less. Similarly, don’t add “price trails,” which are lines that run from the description to the price, which draw attention away from the dish and put it on the price.
Featured Foods: Use fonts, boxes, callouts, and graphics to highlight the foods you want to feature. This will draw attention to the items you want people to notice.
Menu Colors: Color has a deep psychological effect, and the restaurant industry can use colors on their menus to encourage people to order more. Color theory shows that red makes people think of tasty food and may increase the amount they order, and green makes them think of fresh ingredients, so consider incorporating these colors in your menu design.
Eye Movements: Remember how customers tend to browse menus. Apply the golden triangle to add your profitable items to the places where people are most likely to look first, second, and third.
Descriptive Language: Use language that evokes the senses when writing descriptions for your menu items. Avoid figurative or flowery language, but use tangible terms so people can picture themselves eating the item you’re describing.
As you learn more about psychology, apply it to the menu design to make it as effective as possible.
Explore Other Innovative Ways To Refine Your Dining Experience With INFI
As a restaurant owner, you must constantly evaluate how you run your business to make sure it’s profitable. While menu design is important, there are factors beyond your menu template that you can leverage to increase profitability. One of these is with the right ordering system.
INFI offers a self-ordering kiosk and POS systems that help with everything from sales and inventory tracking to the ordering process itself. Discover how you can implement a better ordering process with help from INFI, and combine that with your menu design to increase your gross profits. Learn more about the benefits of a self-ordering kiosk system, then reach out today to schedule a free demo of INFI.