Looking to get your restaurant menu to do more for you? Your menu is not merely a list of dishes - it's your finest silent salesperson. And this is the thing: customers typically take less than two minutes to determine what they'll order. That's why menu design counts so highly.
Imagine menu engineering as assembling your dishes into an all-star lineup. You have your profit stars, your money-makers, and others who are perhaps bench warmers. The Menu Engineering Matrix enables you to know which dishes are contributing to your profit and which require fixing. It is an easy but effective tool that restaurants apply to increase their profits without having to increase prices.
Whether you own a small café or a restaurant that's always filled with people, this guide will teach you how to make your menu more profitable. Go through the process with simple steps that you can implement today.
What Is The Menu Engineering Matrix?
The Menu Engineering Matrix is the graphical aid that makes this analysis come alive. It brings together psychology and data analysis to learn about the way your customers engage with your menu and make buying choices.
Imagine a graph divided into four quarters, where each menu item has its place determined by two important factors: how profitable it is and how well it sells. This easy-to-use yet potent matrix enables restaurant owners to make good decisions regarding menu layout, price, and product placement.
This tactical technique assists restaurant proprietors in driving profits to their highest potential by examining the popularity and profitability of every item on the menu.
The Four Quadrants Of The Menu Engineering Matrix
The matrix is usually segmented into four quadrants, each of which symbolizes a distinct type of menu item:
Stars (High Profit, High Popularity)
Stars are the starbursts of your menu—those items that are both the most profitable and most popular among customers. These are the high-selling, high-volume items that are doing extremely well. They form the core of the menu and must be placed in a strong position and heavily promoted to yield maximum sales.
To allow your Stars to have the greatest impact:
- Position Stars in prime-visibility sections of your menu, such as the top right of your menu or a stand-alone "house specialties" section.
- Maintain these dishes consistently great, as any level of compromise in quality may hurt their popularity.
- Authorize servers to emphasize Stars during customer interactions to increase sales even more.
- Promote Stars on social media, in adverts, or as part of a special event to make your top dishes prominent.
For example, consider a restaurant known for its gourmet burgers. If the "Truffle Mushroom Burger" is consistently one of the top-selling items, generating significant profit due to its premium pricing and low food cost, it would be classified as a Star.
Puzzles (High Profit, Low Popularity)
Puzzles are menu items that provide high profitability but do not perform well under low popularity. Such dishes usually carry greater margins because of high pricing or judicious use of ingredients. However, they are not able to generate interest among diners for several reasons—be it invisibility, unfamiliarity, or improper placement on the menu.
- Promote puzzles on your menu with attention-grabbing design elements, like bold font, strategic positioning in a promotional section, or a "Chef's Recommendation" sticker to attract attention.
- Redo menu descriptions to make these dishes more appealing. Employ tantalizing language that appeals to the senses or highlight distinctive ingredients that make the dish stand out.
- Train waitstaff to recommend Puzzles to customers by providing information about their flavor profiles, cooking techniques, or rarity, making them sound more special and desirable.
For instance, a popular café that serves a "Quinoa Salad" that patrons adore, but with high ingredient prices and low price points, it has a minimal profit margin. While it's a best-seller, the café could promote it as a seasonal offering or pair it with a beverage to boost its perceived value.
Plowhorses (Low Profit, High Popularity)
Plowhorses are profitable items but with thin margins. They bring in customers and volume, but they may not add much to profitability. These crowd-pleasers make guests happy and bring them back, but they will not necessarily add much to your bottom line.
Here are some easy ways to make Plowhorses more profitable without sacrificing their appeal:
- Cut portions slightly to minimize waste and manage costs without compromising customer satisfaction.
- Experiment with small price hikes to determine if customers will pay a little more for their favorite foods.
- Include special touches such as garnishes, unique plating, or higher-quality ingredients to make the meal appear more premium and support higher prices.
- Negotiate prices or substitute ingredients with suppliers to reduce costs while preserving quality.
- Bundle with high-margin items: Combine Plowhorses with high-margin sides, beverages, or desserts to boost overall customer spend.
For example, if you have a family restaurant may have a "Spaghetti and Meatballs" menu item, which is popular and sold in bulk. The ingredients are not very cheap, resulting in low-profit margins. To maximize profitability, the restaurant may consider finding cheaper sources of ingredients or a modest price increase. They may also choose to offer a combo meal with a beverage or dessert as an added value to drive more sales.
Dogs (Low Profit, Low Popularity)
Products that belong in this quadrant are unpopular and low in profitability. They are usually candidates for elimination from the menu, as they don't justify their price and may negatively impact the eating experience.
Before deciding to cut these items, it’s important to understand why they aren’t performing well. Are they too niche? Poorly marketed? Priced incorrectly? Or simply not what your customers want?
At times, a little tweak can make a Dog become a Puzzle or even a Star. Here's how to deal with low-performing menu items effectively:
- Think about whether Dogs are a good fit for your restaurant's brand and customer tastes. If they're not, perhaps it's time to cut them loose.
- Utilize your POS system to determine Dogs. Review their sales volume, profit margins, and customer comments.
- Try to enhance recipes, descriptions, or prices and observe if such items can become more attractive.
- If alterations fail, cut Dogs from your menu to keep things simple and free up room for better items.
- Utilize funds saved by eliminating Dogs to promote your Stars, enhance your Puzzles, or polish your Plowhorses.
For example, if your restaurant offers “Stuffed Mushrooms" that are rarely ordered, especially if they are overshadowed by more popular starters like wings or nachos.
How to Conduct a Menu Engineering Analysis
Utilizing a menu engineering analysis within a restaurant can greatly boost profitability and customer satisfaction. Follow this step-by-step guide on how to make the most of the menu engineering matrix.
Step 1: Collecting And Analyzing Sales Data
The initial process in menu engineering analysis is to gather and analyze the sales data. Monitoring this information is essential for determining which of your menu items are successful as far as popularity and profitability.
From sales data, you can understand which products get ordered regularly and which don't, and with this, make well-informed decisions about the menu. Knowing how sales volume affects profit margins can inform your pricing strategies. By looking at sales data, you can improve your menu to be more in line with customer desires and be more profitable.
Here are some key metrics to evaluate:
- Total Sales: The entire revenue made by each menu item within a particular time.
- Food Cost Percentage: The proportion of the cost of the ingredients to the selling price, used to decide on profitability.
- Gross Profit Margin: The percentage difference between the selling price and the food cost. This is a must-measure to determine the profit each item makes to the total menu. To learn more about profit margins, go to this page on profit margins.
Step 2: Sorting Menu Items Into The Matrix
After you have gathered and analyzed the sales data, the next step is to sort each menu item into one of the four quadrants of the menu engineering matrix. Plot each item using the sales data based on its popularity (sales volume) on the x-axis and profitability (profit margin) on the y-axis. Consider utilizing menu management software that can automate the data analysis and categorization process, making it easier to visualize and manage your menu items.
Step 3: Implementing Changes Based On The Matrix
After placing your menu items into categories, the last thing to do is make changes from the insights received through the matrix. Different optimization strategies are needed for each category, such as:
- Stars: Market these items through marketing campaigns, specialty features on the menu, and placement in highly visible areas.
- Plowhorses: Consider reducing portion size, applying modest price hikes, or improving perceived value through enhanced presentation or upgrading ingredients.
- Puzzles: Prioritize enhancing visibility and promotion. Think about rewriting descriptions, educating staff to suggest these products, or creating limited-time offers to increase sales.
- Dogs: Consider taking these products off the menu or making drastic changes to enhance their popularity. If they don't fit your brand or customers' tastes, it's probably best to phase them out.
Periodically analyze sales information and customer comments to make sure your menu is still in line with customer tastes and profitability objectives. The restaurant business is ever-changing, and constant tweaking is necessary for long-term success.
Menu Psychology & Design Strategies To Maximize Profits
Restaurant owners need to understand menu psychology if they want to maximize profits. The design of a menu can have a strong impact on customers' choices, leading them to high-profit products and improving their overall dining experience.
Menu Structure And Eye Movement Patterns
Menu structure greatly influences the way customers view and select items. Studies indicate that diners' eye movements usually predictably pattern themselves when they scan a menu, which has been termed an "eye movement pattern”.
- Most customers will read through menus in a Z-pattern, beginning at the top left, moving across to the right, and then diagonally to the bottom left. Positioning high-margin items in these prime locations will heighten their visibility and chances of being ordered.
- The use of boxes, borders, or varied colors to highlight certain portions of the menu, like appetizers or chef's specials, can direct attention toward high-margin products.
- Placing high-profit products at the top of the menu or in the middle can attract attention instantly since these positions are usually the first ones customers scan.
Use Descriptive Menu
The words and phrases used to describe dishes on menus can make a big difference in customer decisions. Descriptive language makes dishes more attractive and also affects perceptions of value and quality.
Here are some techniques to write your restaurant menu description:
- Use vivid, sensory words that evoke taste, smell, and texture. For example, instead of simply listing "Grilled Chicken," describe it as "Juicy, herb-marinated grilled chicken served with a zesty lemon butter sauce." This creates a more enticing image in the customer’s mind.
- Emphasize unique or high-quality ingredients to justify higher prices. For instance, mentioning "locally sourced" or "organic" can enhance perceived value.
- Add storytelling ingredients to descriptions, like the provenance of a dish or a chef's inspiration. This may establish a connection with customers and encourage them to order the product.
Pricing Strategies To Drive Customer Decisions
Pricing is an essential element of menu planning that may drive customer actions. Strategic menu pricing may lead diners to premium-margin products and preserve perceived value.
- Employ prices ending in .99 or .95 to make the product appear to be a better value. Charging $12.99 for a product rather than $13.00, for instance, makes it more attractive.
- Place a high-cost item at the beginning of the menu to provide a point of reference. This can make other items seem more reasonably priced by comparison, leading customers to select mid-range items that have greater profit margins.
- Add a very expensive item that won't sell but will make other products appear more desirable. For instance, if a "Premium Steak" costs $50, a "Signature Steak" at $30 can appear to be a better deal, even though it's still a high-margin product.
Enhance Your Profits With A Data-Driven Menu
Ready to make your menu a money-making machine? Your path to menu success begins here with Checkmate. Our innovative menu management solution pairs robust analytics with easy-to-use tools, empowering restaurant owners like you to make informed choices. From intimate cafés to multisite operations, Checkmate evolves to meet your distinct needs. Schedule a demo today to start menu optimization.
