Prosper in 2020 and Beyond by Auditing Your Menu17 min read
In today’s post, we’re proud to offer you truly next-level advice on how to evaluate and audit your menu. After all, your menu is the consumer’s first touch point with your product. It’s a physical—and increasingly digital—representation of your product and service. As such, it’s important that your menu be:
A true reflection of your service story
Tight, organized and to the point
Optimized to drive sales on high profit items
If you follow the tips in this post, we’re confident that you’ll see a spike in profits. This will help ensure you recoup your losses once this nasty COVID situation resolves. Speaking of COVID, let’s get the news out of the way before we jump into menu optimization.
In The News….
We have reports that hard-hit states like Texas and Florida are rolling back their plans to reopen. In Florida, Mayor of Miami-Date Carlos A. Gimenez has signed an emergency order. The order restricts all restaurants to offering takeout or delivery only. The order also closes or forbids:
According to Mayor Gimenez, this step will help to put a dent in the startling hike in new COVID-19 cases. Echoing this are orders from both the governors of Florida and Texas that close bars down…yet again. The move is not without its critics, however, who point out that U.S. states must reopen in order to avoid economic catastrophe. Yet such criticism seems ill timed when new cases are hitting record highs in these states.
Florida now has 123,000 COVID-19 cases, against a total population of 21.48-million.
Back in April, Florida was reporting far fewer cases than hard-hit sates further north such as North Carolina and New York. But now, cases are spiking in the South at an alarming rate.
In Paycheck Protection Program news, President Donald Trump signed a bill Saturday that will re-open the application window. If you have not applied for PPP aid, you now have until August 8th to do so. The goal of the bill is to keep a lifeline open to struggling businesses while politicians work on a second stimulus package.
However, lawmakers are weighing whether they should tighten the qualification parameters of the PPP program. Senators on both sides of the aisle say they support giving out more PPP loans, but that they are in favor of stricter qualification guidelines. According to Sen. Marco Rubio of Florida, businesses should expect to face a means test if they apply for a second loan. Critics of a means test are quick to point out that this would make the process take longer. This in turn would prevent struggling businesses from getting the aid they need.
In international news, President Bolsonaro of Brazil has tested positive for COVID-19. Bolsonaro joins a growing list of leaders who have tested positive for the virus after having dismissed the risk it posed.
That’s the news! Let’s move on to how you can optimize your menu to boost your profits.
Audit Your Menu
Don’t over think. A menu audit is just a cost-benefit analysis. The process gives you a better idea of the efficacy of each item on your menu. In other words, a menu audit helps you determine whether each item on your menu is carrying its weight.
With a menu audit, you will:
Identify menu items that are eating into your profit
Establish new profit goals and targets
Prune dead weight items from your menu
Ensure your long term success
How to Audit Your Menu
The process is fairly straightforward. It’s probably a lot easier than you think, in fact. Coupled with the hard hitting tips in the next section, this audit can set you up for post COVID success.
#1 Examine Sales
Decide on a time period to evaluate. Quarterly is good. Then check your POS reports to find out what your best selling items are. If you’re using an older point-of-sales system, this can be tricky. But on a modern system, it’s a breeze.
Questions to ask:
What dishes sold the most over the time period?
What are your most popular dishes?
What dishes barely sold at all?
For dishes that didn’t sell well, what traits do those dishes have in common?
Which dishes are selling average, or just okay?
For dishes that are selling in the middle range, average, what do they have in common?
To sum up, you want to group your menu items by:
Next, ask yourself, what do the items in each category have in common?
For instance, you may find that your average sellers tend to be high priced items. In that case, you would check to see if any of those high priced average sellers are made up of low cost ingredients. If they are, lower the price. This will likely earn you more sales and thus a higher profit margin.
If you find that many of your poor sellers are priced low, you might have an ingredient quality issue. Taste the ingredients yourself. Is anything off?
#2 Evaluate Your Costs
Next, you want to determine how much each menu item costs to make. Again, a modern POS will make this a lot easier. If you have an older system, you might have to do this manually. It’s well worth the time investment. You can’t evaluate your existing menu if you don’t know your costs.
It can be tricky to come up with an exact figure for each item. Just do the best you can. Or else hire a professional who can get you an exact figure.
For instance, total cost includes the cost of the ingredients used for each item and the time it takes to make. You should also factor in food waste.
But once you have a good cost estimate for each menu item, you can really do some powerful analysis.
For instance, how many of your poor sellers are also high cost? Does it make sense to have them on your menu? If those dishes don’t sell well and they cost a lot to make, then you have a tough choice to make. They’re taking up valuable real estate on your menu. But they don’t provide much value. You can either give them another quarter to see if things pick up, or else remove them. Removing them is the safe choice as this allows you to feature better selling items more prominently on your menu.
#3 Think in Terms of Kitchen Time
The next step is to watch your kitchen crew at work. How long does it take to make each item on your menu? Admittedly, getting this data for every item on your list is a big job. But the more data you can get a hold of, the better off you’ll be.
If you have poor or average sellers that take a long time to make, you may need to cut them from your menu. This gives your kitchen staff more time to prepare your big sellers. More time translates into greater care, which means higher quality. A boost in quality without a corresponding increase in cost means more profit.
Once you’ve completed this process, continue to the menu-optimization tips below to get even more ideas on how to boost sales.
Tips for Creating an Awesome Menu Post COVID
#1 Give Your Customers What They Want
The first step in redefining your restaurant post COVID is to conduct a bit of market research. What dishes do your customers want in 2020 and onward? If you haven’t done market research in a while, you might be surprised to find out what motivates customers these days. It used to be…
…I want what’s cheap and tastes good.
But today’s consumers are more health conscious than ever before. They’re less likely to eat out if they feel that doing so will put inches on their waistline.
So while it might be tempting to focus on comfort food, keep the health-conscious in mind. Do you really need to cook in peanut oil, or can you afford to cook with olive oil? Today’s consumers know that olive oil is healthier than any kind of industrial seed oil. Plus, if you can make the switch to a fruit oil like olive or avocado, you can market your dishes as healthier.
If your research indicates that consumers are looking for healthier options, offer more dishes based on whole foods—even if you have to charge more for these. These dishes tend to be higher in protein and healthy fats. They often contain less refined carbohydrate, too. More on that later.
On the other hand, if your service story is that you offer comfort food, don’t veer toward health food just because. More about your service story later, too.
#2 Take Advantage of How The Human Brain Works
Your customers are hungry, and they’re after instant gratification.
They don’t scan your menu from front to back, like they’re reading a book. Even if you see them flipping from front to back, they’re just looking at pictures. On average, customers spend just 109 seconds looking at a menu. What do you think they’re doing for the majority of that time? Are they reading your dish descriptions or looking at pictures?
It breaks down like this:
There are two conclusions we can draw from this:
We’d better make our menu copy count
Our images had better be top notch
To help your images pop, use clear headers and large, easy to read titles to direct attention.
#3 Do More With Less
No matter what type of eatery you run, your goal should be to make your menu as small as possible. Keep your food descriptions short but descriptive. To that end, review your menu copy for redundant words. For instance, the words fried and battered both imply a cooking process that involves dipping a food in hot oil. The word fried describes the process, but the word battered is more descriptive. Pick one.
Keeping your copy concise will help you fit in even more images.
#4 Emphasize High-Profit Items
Every restaurant should have at least one low cost, high profit item. What’s yours? Take some enticing photos of this item and emphasize it on your menu. If it’s a root beer float, for instance, you’d make that your dessert menu headliner. You might be surprised how many restauranpreneurs overlook this simple strategy. But over time, giving your low cost, high profit items star treatment on your menu and signage can earn you staggering amounts of money.
#5 Create a Delivery Only Menu
If you’re like many restaurants in 2020, you’re not selling your full menu. So create a delivery menu and label it clearly. Then make sure this menu is on your website. Share it on social media. Give it to your delivery partners so they can keep your customers informed. This will prevent customer frustration.
#6 Use Eye Magnets
Does your menu draw the eye to what really matters?
Hire a talented illustrator and create eye magnets for your menu. For instance, let’s say you have a build your own bowl setup. Does your menu let customers know instantly that you operate this way? If your build your own bowl process is buried on page 2, that’s going to confuse customers. If build your own bowl is important to your bottom line, put it on page one and use an eye magnet to draw attention to it.
Note how the graphic above would draw the eye to the “Build Your Own Bowl” heading on your menu. Eye magnets like these help your customers figure out what you’re all about faster. That in turn helps you turn more tables.
#7 Don’t Carve Your Prices in Stone
Consider your menu a living entity. It is not something you create once and forget about.
Adjust your prices based on sales. If you have a very popular dish, that means demand is high. That, in turn, means you’ll be buying more of those ingredients from suppliers. You need to raise the price of that dish somewhat to squeeze as much profit from it as you can.
Of course, raising the price by twenty-five cents is better than raising it by a dollar. Small, incremental changes are what it’s all about. Use your point-of-sale software to track sales before and after you adjust prices. If sales fall off a cliff, you’ve probably raised the price too much.
As a general rule of thumb, small price hikes will lead to better profits than big price hikes will. Customers are more likely to notice the big hike, and they’ll choose a cheaper menu item—sometimes just to spite you.
Of course, if a dish is under-performing, consider lowering the price.
Wondering what good ever came of Yelp?
One good use of the service is to check for feedback on your prices. If you find customers complaining about the price of a particular menu item, ask yourself if you can afford to drop the price by twenty-five cents or so. If you can, do so. Then, next month or quarter, check your point of sale data. Did sales increase?
They probably will.
The reviews indicate that your customers are eager to buy the menu item. But the complaints about the price imply that you’re missing out on sales.
#8 Be Flexible
For restaurants, surviving COVID is all about being flexible. Some restaurants are temporarily offering meal kits. Others are even selling groceries to consumers. Whether you can do this varies by state, country, etc. But at the very least, consider selling the ingredients of your most popular dishes as a meal kit if you can. But note that to make this work, you’ll have to be willing to divulge your recipe. Here’s how to offer a meal kit in broad strokes:
Create a neat, organized and visually appealing recipe card that you can print out cheaply. On this card, list all ingredients—the meal kit contents—as well as clear instructions on how to prepare the meal at home.
The customer orders a meal kit online or over the phone. When the customer arrives, your kitchen staff assembles the meal kit—not before.
Staff triple checks that the meal kit is whole and complete before handing it over to the customer. This will cut back on returns and complaints.
Include a small, well designed Thank You! card with each order.
Including a Thank You! card with all takeout orders—if you can afford to do so—is a good idea too. Anything that keeps you stay top of mind that much longer will help you out compete other eateries.
In the end, the customer goes home with the ingredients they need to prepare a hearty meal and with clear instructions on how to do so.
Next, check your POS data. What’s your biggest seller? Can you sell this dish in a family size? A family size portion might mean that your customer has to leave their home less often. They’ll appreciate this.
#9 Over share
Make sure your customers know that you’re open for delivery and takeout. Put this on your menu and on all your signage. If in doubt, lean toward over doing it. It’s important. To that end, share the good news on social media often. You can use a service like Hootsuite or Buffer to schedule these announcements across various social media platforms. If you use email marketing—and we hope you do—remind your customers in each message that you’re open for takeout and delivery. And, of course, plaster the announcement all over your website.
Remember: you care about your brand the most. Consumers have a lot on their mind. Go out of your way to remind them about your hours and service options whenever you can. But don’t be obnoxious.
Also, as mentioned, make sure to send your delivery menu to your delivery partners. Always keep these services up to date about what you offer. If consumers see something they want on an outdated menu, they’ll get frustrated when they learn that they can’t have it. At that point, there’s a good chance that they’ll check out your competitors.
#10 Keep Your Service Story in Mind
We’ll touch on this more in our next post, but for now, ask yourself: what is your service story?
Let’s look at a few examples:
Their service story is fast service with consistent flavor.
Their service story might be something like, Country flavor at affordable prices.
Located in Arizona, this famous steakhouse’s service story might be, Steak, wine and martinis.
When reevaluating your menu, think about your story. Offer dishes that jive with that story, and don’t stray too far. Often, wild menu experimentation is what takes out a struggling restaurant. If you’re an Italian eatery, don’t start offering tacos just because market data suggests that tacos sell well in your area. An abrupt, mismatched menu swerve like this comes off to patrons as a sign of desperation.
#11 Hyper-Palatable or Filling?
We touched on this in an earlier tip. But did you know what food scientists call the food we offer?
It’s a somewhat unsavory term for food that is…well, delicious. These are dishes or snacks that are, typically, a combination of carbohydrate, fat and protein in roughly this ratio:
The argument is that when this food combination hits the tongue, it pleases the taste buds like nothing else, driving customers to eat more than they otherwise would. This sounds great, right? Well, not so fast. Hyper-palatable food is coming under more and more scrutiny of late. Critics of this type of food suggest that it may be addictive, and that restaurants and food companies that offer it should be more tightly regulated.
We’ll keep you up to date on this topic, and we plan to do a deep dive in a future post.
But for now, what you should be aware of is that you can skew the above ratio more in favor of protein to cut back on this hyper-palatableness—if you choose to.
For instance, a food that is higher in protein and fat and lower in carb will generally be more satiating. You can use this to your advantage if your service story is that you provide good tasting food that fills your customers up. But if you’re a fast food or fast casual restaurant, note that going higher protein always means higher food cost. If food cost is an issue, your best bet is to stick with dishes that utilize refined carbs.
Stay tuned for more on this fascinating concept.
In the section on meal kits, we talked about how you would have to divulge your recipes to make that work. Well, if you’re willing to do that, then you should take it a step further to build some goodwill. Start a blog—or better yet, a YouTube channel—and show customers how to make your dishes. This will keep you top of mind. This, in turn, increases the odds that customers will think of you when business picks up again.
If you’re worried that people won’t come to your restaurant if they know how to make your dishes at home, don’t. Consumers eat out because they don’t want to cook. When things return to normal, you’ll have more business than you know what to do with. Why? Because you’ve spent the interim building your brand and generating goodwill.
We hope you’ve found this post on menu optimization helpful. Stay tuned! Next time we’ll go into more detail about hyper palatable food and your service story. If you found this post helpful, could you give us a share? Thanks!