Biaggi’s staff was skeptical when they gave me a call and asked me to review their menu. They had heard and thought about menu engineering and professional design, but had always designed the menu themselves and had a lot of reservations about using an outside resource. In fact, the only person in the company who wanted to hear what I had to say was the former president and CEO of Biaggi’s, John McDonnell.
I told them it’s important to keep in mind what a well-engineered menu can do for your restaurant business. When properly developed, a menu can increase the plate contribution in your restaurant, which means it can increase the overall amount of money your restaurant generates in dollars to the bank, or into your pocket. It can also smooth out the throughput in your operation, which means you can place a focus on the items that move through the kitchen and out the door more smoothly. A good menu can also enhance the way consumers feel about the food they’re about to order, how much they like your food when they get it and it can even reduce the number of complaints your restaurant staff receives.
But as much as it’s important to keep in mind what a menu can do, it’s also important to remember what it can’t do. No matter how well-engineered a menu is, it cannot keep up with fluctuating food costs. It isn’t great at increasing the foot traffic into your restaurant, and it can’t outsell a server. As an example, if you bring attention to one of your menu items, but your servers don’t support the item, the product will not move very well.
I know this firsthand because one of the restaurant operators I worked with in the Chicago area had just that problem. When anyone tried to order an item that we had highlighted, the servers would talk them out of it. I know this for a fact because I traveled to Chicago to find out why the highlights were not working as well as they should have. When I tried to order one of the items in question, the server frowned and said, “You don’t want that.”
Having said all of this, I can tell you that when the menu is engineered properly, and the design and descriptions are professionally developed, the menu will do a lot to help your restaurant bring in its highest potential for return on investment.
You’re Entitled to a Profit
More than I like to think about, I find myself telling my clients they are entitled to a profit. So often it’s as if the restaurant industry is filled with people who either have low self-esteem, or they think they are going to outsmart the wisdom that has been accumulated over years of restaurant experience. But the things that make a restaurant successful have always been essentially the same: Great location, good food (and by that I mean the food just can’t suck much; it doesn’t have to be the best or even above-average, as evidenced by McDonald’s, Subway and a list of others), professional marketing, clean bathrooms and good people.
Once that’s all covered, find the sweet spot for each item and market the business like your life (and restaurant) depend on it, because in fact, your business does depend on it.
What’s with the Price List?
There are a lot of ways to make a price list, and when I mention this to restaurant operators the picture they get is a product name, a product description and then a bunch of dots that lead over to the price. That is one way to make a price list. But there are a lot of clever ways to make a price list, and in my few decades of design-engineering menus, I’ve seen most of them (but hey, restaurant operators are ever-creative at screwing up their income, so I’m sure I’ll see some new ones in the near future).
Biaggi’s menu fell into this category. When I pointed out that the menu was actually a price list, I got a lot of blank stares and pushback. Because their menu had the prices all at the bottom of the menu descriptions, they thought their menu didn’t qualify as a price list.
But a price list is any menu design in which you place the prices all in a uniform place on the menu and let them stand out or in any way makes them easy to find and compare. I’ll say this again because it’s the single-most important thing you can take away from menu-engineering that will make a positive impact on the profit your restaurant can generate: A price list is any design that allows a consumer to compare prices on a menu.
Prices can be all lined up on one side, all pushed off from the item name, all lined up at the bottom of a paragraph, any bold typeface or color change, or really, anything that calls attention to prices on a menu.
So Why Is It Bad to Call Attention to Prices?
Because you’re not selling prices, you’re selling food. When was the last time someone came into your restaurant and asked for a 17.99 with a side of 3.99? Imagine if people ordered the way most restaurant operators set up their menu. “Hey honey, how about you have this nice 18.99, I’ll have this 14.99 and we’ll share?”
It’s also bad because when you make it easy to compare prices, you will push your guests to order a lower-priced item. I know through experience that restaurant operators who use price lists have a lot more trouble selling the most expensive item on their menu.
So the first step in correcting Biaggi’s menu was to get rid of the price list in every category of the menu (especially the pizza section, which like most restaurants that offer pizza, looked more like a spreadsheet than a menu). So by tucking the prices into paragraphs without calling attention to them, you begin to make the menu about what’s good to eat rather than about what food items cost.
Start with a Menu Matrix
A menu matrix is a scatter graph that puts each item on your menu into one of four categories: Stars, items with higher than average sales and profits; Puzzles, items with higher than average profits but slow sales; Plow Horses (sometimes called cash cows), items with above-average sales but below-average profits; and Dogs, which are items that are below average in both sales and profits.
We like to start with a matrix to help us better understand how the restaurant patron views the menu and food at the restaurant we’re working with. Each day there is a focus group going on at your restaurant. People are deciding if they will eat at your restaurant and when they choose you, they are deciding what looks good to them. The matrix breaks those decisions into a format that provides insights into what customers are thinking when they buy food from your restaurant and what your best opportunity for growth might be in the future.
With Biaggi’s we developed three matrix reports – one for each tier of restaurant in their network. They have more than 20 locations and they are categorized based on the location, demographics and median income levels of those locations, as well as the mind-set of the chef-partners at each store. So we developed a matrix for lower-tier, midtier and higher-tier locations to look at how each price variation might affect consumer behavior.
When looking at a menu scatter graph, we keep the categories separate so each section of the menu is only being compared against other items in the same or similar category. In this way we’re able to look at appetizers, sandwiches, entrées and other like items to determine what’s working and what could be improved. If you run a report on everything in one category, you’ll make it difficult to find the real stars in each category, which will make it nearly impossible to decide what to promote.
On the Biaggi menu matrix reports, we broke the items down into Appetizers, Soups & Salads, Pasta, Pizza & Stromboli, Seafood, From the Farm and Lighter Side, which were the categories on their previous menu.
About Appetizers, Desserts and Sides
Most restaurant operators look at appetizers like any other item on the menu. This is a mistake, in my opinion, because appetizers, like desserts and sides, are incremental. In other words, they add on to the overall profits of the restaurant and don’t need to pay a share of the overhead or fixed costs in the operation.
Think of it this way … When a consumer goes into a restaurant, he or she will very likely purchase food. It’s why the consumer stopped in in the first place. So the only question that remains is what he or she will order. And what’s cool from where you’re sitting is that you can have a lot of influence on what the customer decides.
Now, you can bet the guest is going to have an entrée, salad or a sandwich of some kind. And, in fact, the entrée is the reason the customer came into your restaurant in the first place. But you don’t know if you will sell them an appetizer or dessert. And, in fact, less than 10 percent of the people who visit a restaurant actually do get an appetizer or dessert, on average. When customers order one of these items, the profit, or the leftover money after the food cost is subtracted, can go directly to the bank as long as the appetizer isn’t being substituted for an entrée.
I’ve discovered that many restaurant operators try to get the same amount of money from an appetizer as they do from an entrée or sandwich. And the mistake they’re making is, if they allowed for a higher food cost percentage on the appetizers by lowering the price, they would sell a lot more appetizers as add-on items and make a lot more money in the process.
With Biaggi’s, the first thing they noticed was they didn’t have any appetizers that showed up in the Star category. They were all either Dogs or Plow Horses. And it took a lot of explanation to get them to understand that appetizers are not supposed to be Star items. They don’t have enough plate contribution when compared to other items on the menu to compete as an entrée.
This is the same discussion we have with nearly every restaurant operator we work with. Appetizers are supposed to be before and in addition to a meal. So even if the appetizer has a 45 percent food cost, it’s still delivering an increase in the profits for the restaurant. And if you can keep the prices reasonable without dampening the quality of the finished product, you’re way better off.
Putting Pizza in Perspective
Nearly every Italian restaurant I’ve ever worked with thinks pizza is the most profitable thing they have in their restaurant. And if you look at a large pie at someplace north of $20, that would appear to be true. Most pizzas have a low food-cost percentage, usually less than 30 percent. So they do bring a pretty good buck, especially when compared to a chicken pasta dish that sells for someplace closer to $12.99 and has a 38 percent food cost. The way the restaurant looks at it, they’re taking $14 to the bank for every pizza they sell, compared to just over eight bucks for the pasta dish.
But let’s look at those profits another way. When a customer buys a pizza, they will most likely share it. And in most cases, a larger pizza is going to be shared by up to four people. But for the sake of argument, let’s settle on three. So the fourteen bucks they took to the bank was really only about half as much money as the pasta was able to pull in.
In the case of Biaggi’s, their focus was already on entrées including pasta, seafood and steaks, which made them a much more profitable Italian restaurant than most of the other Italian restaurants we’ve worked with in the past. And the scatter graph supported their focus, reporting 76 percent of their sales coming from a combination of pasta and other entrées.
Why Chefs Don’t Like Highlights
The closest I ever got to a satisfying answer to the question of why restaurant chefs don’t like using highlights on their menu was the one I got from Biaggi’s fouder Todd Hovenden: “I just don’t like ‘em.” And if you don’t like them either, that’s fine, but perhaps I can change your mind about using them anyway.
A highlight is a visual device we use on menus to call attention to items that offer a higher plate contribution in the hopes that they will increase in popularity. HotOperator.com research shows that the best way to highlight an item on a menu is through color, where the highlighted item is boxed into an area that is lighter or brighter than the color of the background.
So why highlight anything on a menu? “If a product wasn’t something we wanted to sell, it wouldn’t be on our menu at all, right?” “Everything is good on my menu.” According to the opinion of many restaurant operators, all the items on their menu should be highlighted. And from the perspective of the restaurant operator or chef, that’s probably true. Except that’s not how consumers look at menus or make decisions about what to eat at a restaurant.
When consumers go into a restaurant, they want to know what you recommend. They are looking for your advice, especially from the chef. So while everything is good, they aren’t going to order everything, they’re going to order something. And that something can have a huge impact on the overall success of your business. How well you position the items on your menu, how well you highlight them, is the secret to getting consumers to order something that will generate more profits.
In fact, it’s just rude not to help your guest decide what to eat. It’s like someone asking you for directions and you say, “I dunno, go whatever way you want.” So while everything on your menu is good, some things are better. And the better item is an item that can become famous over time and that offers you higher than average profitability.
In the case of Biaggi’s and other restaurant operators like them, I could make a very good living on the money they are leaving on the table because they are not taking advantage of helping the guest make better choices in their restaurants. In fact, I offered to skip my regular fees and get paid just on how well the highlighted items performed. They turned me down on that idea, but I would have made a helluva lot more that way than I did on the design-engineering process.
Good Design Is Essential Today
There are two parts to any great menu. There is the science part, which is the engineering process we use, and then there is the art side of the menu, which is more subjective, but every bit as important … especially today with the amount of graphics people are exposed to. In making over the Biaggi’s menu, we wanted to introduce more levels of color and texture along with design elements and details to help the consumer navigate the menu.
The final design gives Biaggi’s a more contemporary and stylish look that is a little more upscale than their original menu. At the same time, it is still very casual, which is just what the client wanted.