Menu Engineering A-Go-Go!

Not the best title in the world, I’ll grant you, but I’m listening to the Misfits as I type this and the song “Nike A-Go-Go” is on. Sometimes these things just flow out of me and I can’t control them.

Anyways, today we’re going to talk a bit about menu engineering (click the link right before this for a Cliffs Notes version!) and how you can use it to your advantage. Well, specifically we’re going to talk about how evaluating how your menu items are performing with some ideas on what to do based on this analysis.

At a later date we’ll be getting into menu design (again: Cliffs Notes version) and leading your customers towards your more profitable items through a variety of subtle (and not so subtle!) tactics. But that’s a whole other ball of wax. And I can’t believe I just typed that. Ahem. Moving on.

LET’S START AT THE BEGINNING

So menu engineering, at least as we know it today, was developed by Dr. Michael Kasavana and Donald Smith in the early ’80s at Michigan State University. Kasavana and Smith took Boston Consulting Group’s matrix conceptualization model and applied it to foodservice; specifically, to evaluating the performance of menu items. They did this by sorting each item into said matrix conceptualization model (aka: a chart) that looks like this (though decidedly not as awesome).

Let’s break these categories down a bit, and then we’ll talk about how to go about assigning your menu items into the proper one.

  • Stars: These items are very profitable and very popular. Ideally, these would be some form of signature dish, and you should be using them as the basis of your menu.
  • Cash cows/workhorses: These terms are used interchangeably, depending on who is making the fancy-pants chart. Anyways, these items are very popular, but have a lower profit margin. More on this  in a bit.
  • Puzzle/challenges: Again, interchangeable terms, but this time they denote items on your menu that have a high profit margin, but aren’t particularly profitable. And again, more on this in a bit as well.
  • Dogs: These items are low on profit and popularity.

DETERMINING WHICH MENU ITEM GOES IN WHICH CATEGORY

First, for the moment we’re going to disregard your food cost percentage entirely, and instead focus on your contribution margins (hearkening, in a way, back to an earlier post that touched on contribution margins vs. percentages). Next, you need to pick a specific time period from which you’ll pull your numbers. I would recommend doing this exercise weekly, if possible, but you’ll definitely want to do it at least once a month.

So here’s what you’re going to do. First, pick a menu category. Let’s say appetizers for now. List them out in a grid (Excel is great for this) with the following information, going across a line for each item:

  • Item Name
  • Number Sold (during the specified time period)
  • Popularity percentage (leave this one blank for the moment)
  • Food Cost
  • Sell Price
  • Item Profit (which is your sell price minus your food cost)
  • Total cost (your food cost multiplied by the number sold during that time period)
  • Total Revenue (your sell price multiplied by the number sold during that time period)
  • Total Profit (your total revenue minus your total cost)

Now that you’ve done that, let’s get a few baseline numbers.

First, add up to the total number of items sold. Then, add up your total costs, your total revenues and your total profits. To get your food cost percentage, divide your total costs by your total revenues, then multiply by 100. To get your average item profit, divide your total profits from all your items by the total number of items sold.

Next, it’s time to fill in those popularity percentages.

To get your popularity percentage on a given item, simply divide the number of that item sold by the total number of all items sold, then multiply it by 100. Go ahead and fill those in now. It’s okay, I’ll wait.

…Done? Cool. Now let’s use these numbers to assign high and low values to an individual item’s popularity and profits. We’ll do profits first, since that one is easier; simply compare an item’s profit (again, sell price minus food cost) to the average item profit. Is it higher? Then you can mark it as a high profit item. Vice versa if it’s lower.

Now, let’s do popularity. First, let’s determine an average popularity percentage by dividing 100 (as in “100%) by the total number of items in your appetizers category. Let’s say that number is 8. Your average popularity percentage is going to be 12.5. Now compare that to the Item Popularity Percentage that you calculated a few steps back. If this number is within 80% or more of our hypothetical 12.5, which in this example is 10 or higher. So if an item’s popularity percentage is 10 or more (again, in this specific example), you can mark its popularity as being “high,” vice versa if that number is below 10.

NOW WHAT?

Any item that’s high profit and high popularity is, obviously, a star. Let that gravy train keep-a-rolling.

Conversely, any item that’s low in popularity and profit is a dog. It’s time to start thinking about ditching that and potentially replacing it with something new.

Your workhorses are the menu items that have high popularity but low profitability. Your goal here is to find a way to make it more profitable without killing its popularity. This can be as simple as increasing its selling price or as elaborate as having your chef make subtle ingredient substitutions in order to lower the food cost.

The puzzles are items that have high profitability but low popularity. The object here, obviously, is to find a way to make it more popular. You can attempt this through menu design (which we’ll be going into in-depth in the near future) by trying to lead your customers to the item (after all, maybe it’s buried in the middle somewhere) or renaming it something more appealing.

Menu Design For Fun and Profit. But Mostly Profit

Okay, entirely profit. Menu design for profit.

So yesterday we talked a bit about menu engineering; that is, how to evaluate and categorize the performance of a given menu item during a set period of time, and what to do with that information. Today we’re going to continue to build off of that a bit by jumping into the topic of menu design.

Beyond the initial engineering stage, there are several aspects that factor into putting together a killer menu. There is, of course, the layout itself, but there is also menu pricing and menu writing. I might go into those topics more in-depth at a later date, but for now feel free to click through those links to whet your appetite (not an intentional pun, I swear!). Today—in part one of a multipart series—I’ll be going over how to turn human psychology to your advantage when crafting your menu.

Introductions aside, let’s talk about the serial position effect and what it can do for you.

So the gist of the serial position effect is that a person’s ability to accuracy in recalling items on a list is dependent on those items’ position on said list. This then splits off into two directions: the recency effect and the primacy effect.

THE RECENCY EFFECT

Most people, when asked to recount items from a list, will start with the last ones first. This is the recency effect. These items are still fresh in their short-term memory, which makes them easier to recall.

This concept branches out into a lot of other related areas. For instance, in autobiographical memory, people recall more recent events well before they get to the remote stuff. And the recency effect can also affect peoples’ perception of an experience. For the most part, humans judge their experiences based on how they were at their peak (whether positive or negative) and how they were when they ended.

THE PRIMACY EFFECT

The primacy effect is the opposite of the recency effect, in that it says that people will remember the first few items on a list much better than subsequent items (at least until the recency effect kicks in). Note that this effect is diminished when items are presented quickly. The primacy effect works because at the outset, there is less information to process and thus it’s easier for the brain to file it away in long-term memory. By throwing information too quickly at the brain, it doesn’t have as much of an opportunity to keep up, and it will struggle to recall the first few items as well.

IN PRACTICE

So the takeaway from this is (obviously) that on a list of menu items, the most important spots are the first few and the last few. Everything else has the potential to be lost in the shuffle. As such you want to put your most important (read: profitable) items in those positions. And, if possible, you might want to think about limiting the number of menu items on a given list in an effort to give the items in the middle a fair shake as well.

But! You can also apply recency and primacy to other things as well. Remember when I said that the primacy effect diminishes when someone is presented with information very quickly? That means that if you have verbal specials, make sure your waitstaff makes sure that each menu item has a chance to sink in before moving to the next one.

And remember that one time when I said that someone’s perception of an experience is primarily based on how it was at its peak (whether super awesome or totally terrible or just plain meh) and how it was at the end (aka peak-end)? That means from a customer service standpoint, you have an opportunity to mitigate a poor experience.

THE END?

So you may have known about the top and bottom of your menu being sweet spots, but now you know the who, what, where, when, why and how of them being sweet spots. Okay, maybe not the where; I could make something up there but it would really be a stretch and I respect you too much to do that. Whatever. The fact is that you’re now ready to unleash the serial position effect on your business.

Stay tuned for more tips on how human psychology affects menu design.

 

Restaurant Color Psychology

So the last couple of days we’ve been talking about situational territoriality, and how things like personal space can affect your diners’ behavior and levels of satisfaction. Today we’re going to pivot a bit and move the discussion into color psychology.

Quick aside: I’m partially color blind (red + green). I’m pretty sure that I’ve mentioned that in the past, but in case you’re new, there you go. Despite this fact, for years I worked in a photo lab doing color corrections on customers’ pictures, and that experience somehow let me skip the Color Theory pre-requisite that my Color Photography class in college had. So I sort of scammed my way through, which was pretty awesome. And has nothing to do with anything, except, you know, colors.

Color is another one of those areas where there is a large amount of cultural baggage and subconscious processing going on. Retail and marketers have been hip to this for years, and a ton of time, effort and money has been thrown at research to determine how people react to different colors. Restaurant designers have also gotten in on the act as well, coming up with color schemes that evoke the desired mood and feel of the overall concept.

COLOR PSYCHOLOGY

Today we’re going to go over some of the underlying reactions that people have to specific colors. Ready, set, GO!

LIGHT & COOL COLORS

Cool colors, lighter colors and lighter shades of colors “recede” from the eye. That is, they give a feeling of airiness. If you want to make a small room look bigger, lighter colors are the way to go.

DARK & WARM COLORS

Warm colors, dark colors are the opposite: they “advance” towards the eye. You can use them to make big rooms feel cozy, but be warned that dark colors can get oppressive quickly.

BOLD & PRIMARY COLORS

Bold colors and/or primary colors tend to convey urgency and speed, which can be a subtle hint to decrease meal duration.

SUBTLE COLORS

Subtle colors (think pastels) are more relaxing and encourage lingering.

BLACK

Like most colors, black has both positive and negative connotations. On one hand, it’s classy, modern and authoritative. On the other, in Western cultures it’s synonymous with death and evil. I personally like black quite a bit, but I’m also writing this while wearing a black heavy metal t-shirt, so take my opinion with a grain of salt. It’s great as an accent color, and if you’re clever about it can even step up and be the main attraction.

BLUE

Blue historically symbolizes loyalty and serenity, which are good qualities to have! But it’s also an appetite suppressor, because in a food context our bodies equate blue with toxin and spoilage. Ugh!

BROWN

Brown is a neutral color that tends to be calming. Darker browns are more opulent and masculine, lighter browns are warmer and feminine.

GREEN

Green is calm and soothing and earthy and can be warming or cooling, depending on the shade.

GREY

Classy and timeless or dull and boring? It all depends on how you use it. Greys are very flexible neutral colors to work into a color scheme. They can class up a place or give it a calming feeling.

ORANGE

An appetite stimulant. Warm, fun, vibrant. Darker shades can be soothing, lighter shades are loud and energetic. Earthy and autumnal.

PURPLE

Rich, luxurious and decadent. Calming. An appetite suppressor.

RED

Another one of those colors that have a number of different meanings. Red is an appetite stimulant. It can be warm, inviting, cozy, passionate and exciting. Very flexible, though almost always bold.

WHITE

Cleanliness and purity. Depending on the decor it can be dull and drab or calming and airy. White can help decrease your meal durations because it can also be glaring and oppressive.

YELLOW

Before my son was born, we decided that we were going to have a space-themed room for him. The blue paint that we chose ended up sucking and didn’t coat evenly after numerous attempts. For some reason, we decided to do a yellow room instead, thinking that we’d offset it with dark blue accents. Man, what a nightmare. It was absolutely obnoxious to look at, and the room glowed.

Yellow is the hardest color for the human eye to process, so a little goes a long way. It’s a stimulating color across the board, and tends to be associated with warmth and happiness.

Eye Movement Patterns, Scanpaths and the Almighty Sweet Spot

Fun fact for the day: supermarkets that have their shopping paths running counter-clockwise around the store have a $2 per cart higher average than supermarkets that have clockwise paths. I have no idea why, I just read that a little while ago and thought I’d share. Prepare to impress everyone you meet at the next party you attend!

Today we’re going to be talking a bit about menu layouts. Specifically, as the title says, we’re going to be talking about using eye movement patterns and scanpaths to determine your menu’s sweet spots. Also: I’m eating pizza bread as I type this, and it’s delicious.

What can I say? It’s a sharing kind of day. Note: that was an unintentional rhyme.

What is this stuff?

I’m glad I pretended that you asked. I’ll save you the flippant response for eye movement patterns; that’s pretty self-explanatory. And sweet spots are obviously spots that are sweet. This is the prime real estate on your menu that you want to position your most profitable items (which we learned how to deduce during our menu engineering discussion) in.

What about scanpaths, then?

A scanpath is a series of eye fixations when looking at some sort of visual scene. In this case, the scene is your menu and the fixations are the different areas of your menu. In other words, a scanpath is the order in which a customer reads through your menu.

Let’s take a closer look at some sample paths.

Industry Convention

Today we’re going to be talk about that perennial workhorse of menu design, the single fold, two-panel menu.

Industry convention states that people are initially drawn to the upper-right of a menu, and then go to the upper-left. Opinion is split as to whether or not it then goes around in a counter-clockwise pattern or if it zigzags. Here’s a picture, courtesy of the awesomely-named and insanely helpful Vaneepedia:

Eye Diagram
Industry convention: two-panel menu scanpath #1

Based on recency and primacy, your sweet spots here would be 1, 2 and 4. Now let’s look at another example:

eye movement
Industry convention: two-panel menu scanpath #2

Here your sweetest spots would be 1, 2 and 7, while 4 is a barren wasteland. Again, that’s basing it on recency and primacy.

This is all based on work done by one William Doerfler in the 1970s. Doerfler was a graphic designer-turned-menu consultant who, through the course of his work, determined that people are instinctively drawn to the upper-right corner while reading a two-panel menu. Also, and perhaps relatedly: “Doerfler” is an awesome last name. Anyway, his model looked like this:

doerfler
Doerfler menu model

As you can see, he felt that the best spot on a menu was on the right side, just above  the middle. After that, basically everything in the upper right half was golden, everything on the lower left half was a pit that you’d cast your menu dogs into, never to be heard from again. And this is what the last thirty years of menu design have been based on: putting your high profit items in your sweet spots and burying your lower-profit items.

Conflict!

Not everyone takes this particular model of eye movement patterns as gospel, however. A criticism of the Doerfler model is that it hasn’t really been subjected to the rigors of empirical testing. For instance, in 1987 the National Restaurant Association commissioned Gallup to do an eye movement study (titled “Through the Eyes of the Consumer”), and Gallup found that people read menus the way that you’d think they read menus: like a book. They start at the top left, go down the first page and continue on to the second.

Recently, another study was undertaken by Sybil Yang (who we’ve cited before while discussing price presentation) at Cornell University. Titled “Eye Movements on Restaurant Menus: A Revisitation on Gaze Motion and Consumer Scanpaths” (and also the source of some of the graphics used in this post), its findings mirror that of Gallup twenty years earlier. This one used a fancy-pants infrared pupil/corneal reflection eye tracking system to determine the test participants’ scanpaths of the menu. This test found that most people did a cursory examination of the menu like a book, then focused their attention on the entrees. Once an entree was selected, the rest of the meal was built around that.

Total conjecture time: since most menus tend to start with appetizers and then work their way to entrees, it’s possible that people are spending more time in the upper right of a menu because that’s where the beginning of their decision-making process (the entrees) often lies. Again, that’s pure conjecture on my part and I’m no scientist, so take it with a grain of salt.

In yet another study (this one done in Korea) titled “An Experiment on Psychological Gaze Motion: A Re-Examination of Item Selection Behavior of Restaurant Customers” (Choi, et al) they find that a solid third of the participants in the study are likely to order an item to which their attention is initially drawn. That’s nothing to sneeze at, though it runs counter to other studies on the subject (including “Eye Movements on Restaurant Menus,” cited above, along with “Understanding Menu Psychology: An Empirical Investigation of Menu Design and Customer Response” by Sarah Daniels, which basically says we’re all doomed and are totally wasting our time with this stuff).

Note that I’m not trying to confuse anyone by bringing up conflicting research on the subject, I just want to make sure that you’re able to make informed decisions.

HOUSEKEEPING

I just wanted to mention that in yesterday’s post about choosing a font for your menu, my wife wanted me to mention that you should never, ever use Papyrus. The font, that is. Not the paper the Egyptians made from the papyrus plant. I suppose that’s fair game and might make for an interesting conversation-starter. So don’t use Papyrus the font, but do use papyrus the paper.

And… I guess that’s it for today. We’ll be expanding on this in the near future (maybe tomorrow!) when we talk about using eye magnets to draw attention to sweet spots.