Is Your Menu Leaving Money On The Table?

Believe it or not, over 90% of all menus are leaving money on the table for a number of reasons. In fact, based on my experience with restaurants over the past 20 years, the measurable impact of this loss ranges from $.25-1.50 for every meal served in the restaurant.   Based on the number of meals sold in most restaurant companies, this adds up to a lot of lost dollars!

The following list highlights the top ten factors, which contribute to this huge loss of income. Use this checklist to determine how your menu stacks up.

  1. Does the menu primarily have a creative orientation? When revising the menu, is the primary consideration the look of the menu  (design, size, format, color, etc.).  If the answer is yes, your menu is guaranteed to be losing money.  Rather, it is most important to first develop a well-planned merchandising and marketing strategy for the menu. After this strategy is determined, “creative” should be used to support the strategy.
  2. Is the menu democratic  – do all product names and their descriptive copy have equal appeal?    To be most effective, there needs to be a product “continuum of appeal” which reflects what we want or need to sell. All products may taste good, but some need to be communicated as being more desirable.  In other words, those products we want or need to sell should sound better than those we do not.
  3. Also related to point #2,is there a clear priority for what you want to sell? Because we humans can process a limited amount of information, and   because most people prefer not to spend a lot of time trying to figure out the menu, it is critical to determine what you want or need to sell. In fact, all products should be prioritized from most preferred through least preferred.
  4. Do you view the menu as real estate? In fact, the menu is the most important real estate the company owns, since it will generate the overwhelming majority of the company’s sales and profits. A very important part of the menu strategy is to assign appropriate units of real estate   to the individual tenants  (i.e. product is) on the menu.   Obviously, important tenants receive premium real estate, while less important tenants receive poorer locations.
  5. It is amazing that most menus do not answer the basic questions that guests want answered:

“What’s really good?”

“What are the restaurant’s signature items?”

“What should I order right now?”

How well does your menu answer these questions?

  1. Can the guests read the menu quickly and process its content efficiently?  Or, is the menu difficult to navigate because it contains too much information, is overwhelming, confusing, or even too stimulating?  Again, because of the inherent processing and time limitations discussed above, the menu needs to help the guest process its content, not make it more difficult.
  2. How focused is the menu? Are the most important categories and products clearly emphasized?  A good way of understanding this point is to view the menu as needing to have a tour guide built into it. When the menu has a clear-cut starting point, then the tour guide leads the reader through the menu on a very definite and strategic review of the menu. Without the tour guide, the reader will certainly get lost and have a difficult time appreciating your restaurant/menu’s most unique features/products.
  3. Do you copy the competition? Whether it is the type or style of menu, design characteristics, or even products and merchandising, there are hazards involved with this approach. Remember the statement that 90% of all menus have problems?  Then why copy other menus when they have such a high probability of being “wrong”?  You can gain more by developing a strategy that reflects your restaurant’s uniqueness rather than copying somebody else’s.
  4. Check out the following rules of thumb and see if they apply in your restaurant:
    • If you sell entree specials, do they represent at least 20% of the entree menu mix?
    • Do 20% of your guests order an appetizer or dessert with their meal?

If the answer is no to either question, your menu is underachieving.

Please note: These guidelines apply to casual and dinner house restaurants.  With higher priced concepts, the percentages should be even higher (i.e. up to 40-60% in fine dining restaurants).

  1. Finally, how are products listed within their specific categories – in one single column or in two or even three columns?  “Primacy” and “recency” are psychological principles stating hat people are best at processing information that they see first or last. These principles can be best applied when using single columns. Using multiple columns decreases the likelihood of definitively predicting and influencing what information the guest is processing.

So, how did you do?  Did you find room for improvement in your menu?  How much opportunity does your menu have to generate more profit dollars? If you would like to discuss your menu in greater detail, give Bill a call at 513-703-3476.

Bill Paul is Founder and President of The Menu Advantage® in Milford, Ohio and has worked with successful restaurant companies since 1986. Bill can be reached at 513-703-3476 or visit his Web site, www.menuadvantage.com.