Your menu is much more than just a price list for your pizzas. According to restaurant consultant Gregg Rapp from Palm Springs, California-based Menu Technologies, it’s the ultimate power tool for sales, and a few simple tweaks can boost its profit making potential by 15% or more. The process is called menu engineering—the study of menu design based on the profitability and popularity of individual items and their placement on the menu—and it’s rooted in decades of research that began at Michigan State University in the early 1980s. Best of all, it can work for any restaurant, regardless of size or type, Rapp says. “Menu engineering takes time, but once you’ve done it, you feel like you’re on top of the mountain looking down,” he says.
Rapp counts many top chains as his clients, including California Pizza Kitchen (cpk.com), Chili’s, Applebee’s, Taco Bell and Subway. He says restaurant operators can increase their profits by making subtle but important changes on their menus, using a blend of basic psychology and insights into how the human eye naturally scans a page. And he must be doing something right—he has been featured on NBC’s Today show and hailed as “The Menu Magician” in Time magazine.
“Your menu is your most powerful tool,” Rapp says. “It needs to be strategically worded and designed in order to achieve your goals. With menu engineering, you come to understand each item’s profitability, its popularity and how it relates to the other items on the menu. By tracking each item’s profitability and popularity, we know the item’s profile and where it belongs on the menu.”
Counting the Costs
Menu engineering begins with a comprehensive survey of food costs, breaking down every item to its individual ingredients and knowing exactly how much it costs to create each item. If you don’t know how much your bacon cheeseburger pizza actually costs you to make, Rapp says, you can’t know how to price it for maximum profitability, and you can’t know where to position it on your menu. “Too many operators don’t take the time to figure out the costs on each menu item, so this is my biggest battle,” Rapp says. “I can and will help them with that, but I’d rather they do it themselves. I know there are 1,553 pickle chips in a five-gallon drum. How do I know that? Because I counted the pickle chips in a five-gallon drum once, and I’ll never forget that. If you do your own costing as a restaurant operator, you’ll remember those things. You’ll remember that each olive costs you, say, 11 cents, so when you see your servers eating olives while they’re waiting at the bar for a customer’s drink, you can actually count how much money they’re eating.”
Zeroing in on the smallest details of food costing will yield big dividends, Rapp believes. “Once operators get this and understand it, they love it,” he notes. “Now they know all of the answers to all of the questions—the numbers are right there in front of you. When you don’t do your costing, you’re just shooting in the dark. You’re just guessing.”
Setting prices, meanwhile, requires some finesse and insight into what makes your restaurant tick. It pays to know your clientele and why they eat at your restaurant. Are they largely price-conscious or trendy types? Are they looking for locally grown ingredients and willing to pay more for them? “Pricing your items is an art, not a science,” Rapp says. “It’s all about the most you can get for this pizza. What does your competitor charge? Why are your pizzas different and better than your competitors’? That’s how you come up with the price.”
Breaking It Down
Rapp recommends dividing your menu into categories and breaking categories down into sections. For example, categories for a pizzeria may be pizzas, appetizers, sandwiches, drinks and desserts. In turn, the pizza category could be split into sections such as chicken, pork, beef and vegetarian. Each section should include about five menu items with strong descriptions. “I teach operators to put no more than seven items in a single section,” Rapp says. “Five is optimal; seven is maximum.”
It’s also a good idea to offer special menu sections designed and priced for certain demographic groups—this strategy allows you to attract a wide range of customers with varying preferences. “If you have separate sections for specific audiences, it’s like a handshake to those groups that says, ‘Come on in.’ A vegetarian section is a handshake to our vegetarian friends, and they appreciate it. A seniors menu, a kids menu, a tour bus menu, a team menu—each is a handshake that says, ‘We want your business.’”
To fine-tune their offerings before finalizing the menu, Rapp encourages his clients to place each menu item into one of four quadrants:
Stars—High profitability and high popularity. Your menu should highlight the Stars, of course, to maximize sales and boost your profit margin.
Plow Horses—Low profitability and high popularity. These items pull in customers and are price-sensitive, Rapp explains, “so you don’t want to mess with them. But you may want to figure out ways to add another item to increase your profits by a few cents. If your soup and salad is a Plow Horse at $4.95, can you build a three-salad sampler at $5.95 and get these guests to take a step up?”
Puzzles—High profitability and low popularity. Encourage servers to promote these items to guests and follow up for their reactions. Are the items unpopular because they’re just not very good? Are they too expensive? Or are they simply going unnoticed?
Dogs—Low profitability and low popularity. Either ditch these items or, if you want to keep some of them, don’t feature them prominently on the menu. Tweaking the recipes could help, too.
Every menu has a “sweet spot”—a section to which the human eye is naturally drawn as it scans across the page. Rapp identifies the upper right-hand area of a page as the sweet spot, and operators should think carefully about which item they want to feature there. Obviously, it should be one of your “Star” items, but that’s not the only consideration. “There may be four people ordering a large pizza, so you have to take the profitability of the pizza and divide it by four,” Rapp says. “But if each person ordered a lasagna, you could make twice as much profit as you’d make on the pizza. So do you want to put your pizza section or pasta section in that spot? This is something the operator needs to figure out.”
If you put a pizza in the sweet spot, make it a specialty pie with a high profit margin, Rapp adds. According to studies, the more time a group of customers spends deliberating on what to order, the less likely they are to purchase add-ons that could boost your bottom line. “Think about a build-your-own pizza versus a specialty pizza,” Rapp says. “If the customers spend a lot of time discussing the toppings they want, they won’t order those add-ons, such as salads, breadsticks and desserts.”
In addition to knowing each item’s profitability, the operator needs to understand—and be ready to explain—what makes each item unique and better than anything a competitor can offer. Every item should have a back story, even if it’s not detailed on the menu itself. “Why do you have this item on your menu?” Rapp says. “Why did it make the menu when a hundred other items didn’t? Where did your inspiration for it come from? Was it your grandmother’s recipe?” Share the back story with your servers so they can pass it on to customers. “When the servers know the back story, they have more confidence. And I think a server that has more confidence will feel more comfortable helping the customers find the items they will like, thus bringing the customer back. It’s not always about upselling—our main objective is to bring every customer back again and again.”
But Rapp is just getting warmed up. There are many other factors to consider, including:
The name game. Don’t use a name that requires the guest to read the description. “Joe’s Favorite Chicken Parmesan” reveals what your customer needs to know about the dish whereas the more generic “Joe’s Favorite” says almost nothing. Also, if you’ve got a great item that customers haven’t discovered yet, give it a new, better name to call attention to it.
Careful wording. Mouthwatering descriptions will drive sales, but most chefs aren’t copywriters. “If you sit your chef down at a keyboard and ask him to write a description, he’ll draw a blank,” Rapp says. “Instead, have him talk about the item into a tape recorder and then go back and edit it, adding words that illustrate how your item is better than similar items on the market.” Use vivid adjectives to describe flavor or texture, such as “savory,” “crispy,” “creamy,” “crunchy,” “buttery” and “zesty,” along with words that explain the cooking method, including “handcrafted,” “housemade,” “grilled” or “smoked.” But keep the descriptions short and simple; don’t make your guests work too hard to understand them, and avoid excessively florid language.
Dollars and cents. Using dollar signs on menu prices merely reminds the customer that he’s shelling out his hard-earned cash at your pizzeria. “I’ve been taking dollar signs off menus for 32 years now,” Rapp says. “Let’s say you have 150 items on the menu with 150 dollar signs. If you take those off, it will soften the pricing on that menu.” As for listing cents—such as .95 or .00—that’s a judgment call and depends on the restaurant. “A .95 is nicer and friendlier, whereas the .00 has more attitude and is a little snobbier. Imagine the W Hotels pricing their items with .95. And .99 is even cheesier.” In short, a friendly neighborhood pizzeria should use .95, while an upscale, trendier operation should go with .00 pricing or no cents at all.
Leader dots. Some menus feature a name and description of the item followed by leader dots………that guide the guest’s eye to the price. Bad idea, Rapp says. “That gives the customer a price list they can scan up and down, looking for the cheapest item first and then going over to read the description. Your price-sensitive customers will find the cheapest item on the menu anyway, but if you use this approach, you’re making a person who may not usually be price-sensitive look at the menu based on price.”
Downsizing. A large menu with a lot of pictures can be too much to absorb. “When your customer is overwhelmed, he will default to the item he already knows,” Rapp says. “The goal is to get customers into the menu and persuade them to order something they wouldn’t necessarily order. If a guest finds three items on the menu that he likes, he’ll come back.”
Finally, operators can make use of attention-grabbing visuals to draw attention to their best moneymaking items. Just don’t get carried away, Rapp warns. Boxes, for example, grab the eye, but too many clutter up your menu. “The more boxes we use, the less effective they become,” he says. “A picture is another tool, but a picture, I believe, can take your concept down a few steps, making it more like a coffee shop. I don’t think that a lot of restaurants that use pictures should use pictures, even though they’re easier on the eye. I tell my clients that illustrations are better than pictures.”
Sound counterintuitive? Maybe so, but Rapp can back it up with scientific research on how the brain works. “Recent studies show that, when you see a picture of a food item, your brain ‘tastes’ that item. When you see 60 pictures of chocolate cake on Instagram and then I bring you a piece of chocolate cake, you almost don’t want it now because you’ve already had too much—your brain has, in a sense, already experienced it!”