What makes a great restaurant? Is it stellar employees, or does a one-of-a-kind menu steal the show? What about the all-important atmosphere? The answer: All of these factors play a role. 

If you’ve compiled an unforgettable selection of food items and a great team, you are well on your way to restaurant success. The next big step is to cultivate the perfect menu. 

With that in mind, we’ve created our menu engineering guide. Below is everything you need to know about showcasing your chef’s skills and increasing sales with a dynamic menu. 

What Is Menu Engineering?

Menu engineering is a strategy for evaluating your restaurant’s pricing by using sales data and average food costs. This information will help you strategically adjust your prices and offerings, resulting in increased sales and revenue. 

After you’ve crunched the numbers, you’ll need to categorize your menu items into tiers, which may include:

• High profit, high popularity
• High popularity, low profit
• Low popularity, high profit
• Low profit, low popularity 

The first category — high profit, high popularity — is your all-star lineup of food items. Customers love them, and so does your bank account. Low-profit items that are unpopular with patrons might be on the chopping block. Items that fall in the middle may need some tweaking.

For example, you want to increase the popularity of high-profit items that don’t generate as many sales as you’d like. On the other hand, you should explore ways to reduce the cost of making popular, low-profit items so you can improve your margins. 

What Is Menu Psychology?

Before getting into the meat and potatoes of this menu engineering guide, it’s important to discuss one more concept: menu psychology. Menu psychology involves using psychological principles to influence customer decision-making and draw patrons toward high-profit items. Remember, you want them to purchase as many of those products as possible while shying away from low-profit offerings. 

Menu Engineering Tips 

Here are six menu engineering tips to help maximize your profits without compromising food quality: 

Conduct a Menu Profit Analysis 

A menu profit analysis, which is the first step in any menu engineering process, helps you understand the profitability and popularity of each menu item. After you’ve analyzed your offerings, categorize them using the four groups outlined above. 

Don’t just rely on the numbers. Make notes of where the products are positioned on the menu, how they are organized, and what surrounds them. For example, suppose the majority of your high-profit, high-popularity items are immediately above or below an image. In that case, it can be safe to assume that the visual element is helping draw attention to those offerings.

Highlight High-Profit Items

After you know which products generate the most revenue per transaction, you can revamp your menu. It’s important to highlight high-profit items so you can create more profits per sale. 

While you shouldn’t necessarily eliminate low-profit offerings, it’s important to understand why you aren’t seeing much profit on those items. Is your price too high, or are customers simply not ordering enough of the product to offset your ordering costs? 

If a popular item has a low profit margin, see if you can improve the margins without lowering food quality. Explore different ingredient sources and vendors to increase the profits of items that customers already love. 

Optimize Your Layout

The page layout has a huge impact on menu quality and readability. Consider how many photos your menu currently has. If your menu is packed with pictures, patrons may view your restaurant as a lower-end establishment. However, that doesn’t mean you should eliminate all photos.

Research suggests that one photo per page is best. Adding a single image to each page of your menu can increase sales by up to 30%.

Use Pricing Psychology

Pricing psychology can help you increase the popularity of high-profit foods that simply haven’t caught customers’ attention. For example, consider that a particular menu item is listed at $15 and generates about $5 of profit per sale. However, customers rarely order it. 

By lowering the price to $14.99, you might be able to encourage more customers to order the item. Using 99 cents in pricing is known as charm pricing. It softens the perceived cost of a product. 

Alternatively, you could move a few of your high-profit, low-popularity items to the Daily Deal section of your menu. Even if you don’t change the price, customers might feel like they are getting good value on the meal because of how you advertise it. 

Offer Upsells and Add-Ons

Lowering food quality should never be an option. Instead, explore ways to pair low-profit and high-profit items to generate more revenue. Suppose one of your appetizers is a high-profit item, but it doesn’t get ordered very often. You also have an entree that’s a huge hit with patrons, but each sale nets a low profit.

Why not offer those two items as a combo meal? You could even offer a modest discount on the high-profit appetizer. This simple tactic will drive up the average order value and increase your total profits per transaction. It would also offset the low-profit nature of the popular entree without forcing you to reduce food quality. 

Regularly Analyze Menu Performance 

Periodically analyze your menu’s performance to stay up-to-speed on customer trends and shifting preferences. Some menu items will be perennial staples that patrons turn to for decades. Others may fade in popularity over time.

Additionally, the costs of raw materials and ingredients can fluctuate. These shifts may negatively impact the profitability of once-popular items. A periodic review of your offerings will help when adjusting your menu pricing and offerings to remain relevant and popular.

Do You Have a Winning Menu?

Our menu engineering guide can help you understand and optimize the quality of your food offerings. Producing great food is only half the battle. You still have to draw consumers to those offerings with an expertly designed menu. 

Never assume your menu is good enough. Consistently analyze item performance and enhance your offerings to maximize profitability. Before you know it, you’ll be hitting your profit goals and setting the stage for long-term business growth.