Psychological Pricing and More: 3 Simple Tips for Optimizing Your Menu

Imagine this scenario for a second: you enter a restaurant and take a seat at your table. The server presents a menu to you, and you sift through the options, looking for something that piques your culinary interest. How do you make your selection and what motivates this choice? Although it may seem like a question from a school examination, it's actually a query that every diner asks themselves whenever they are presented with a menu. Consequently, it's paramount for every restaurant owner to simplify this decision-making process as much as they can. This can be achieved through the application of pricing psychology and efficient designs. These strategies can make certain dishes on your menu seem more attractive, make pricey dishes appear less costly, and transform add-ons like drinks and desserts from being optional to essential. Moreover, by understanding the basic cost of ingredients and labor, the prices offered by your rival restaurants, and the amount your patrons are willing to part with, you can also establish the optimal price for specific items on your menu. In this write-up, we'll disclose three uncomplicated but impressively efficient methods and tactics that you can implement to optimize your menu. This will result in an improved average expenditure per table, an uptick in repeat customers, and a stronger brand identity for your restaurant. Assess your competitors to set your prices Food cost pricing is one common way of determining the prices for items in a restaurant. This strategy considers the cost of the food, factoring in the work involved in its preparation to establish a logical menu price. To demonstrate, if a dish has a preparation cost of $5 and you desire a food cost percentage of 25%, the recipe should be priced at $20. This ensures your restaurant a 75% profit margin every time it's ordered. While food cost pricing provides your restaurant with a foreseeable profit margin, it overlooks a significant aspect of managing a successful eatery – offering better value compared to competitors, either in terms of pricing or quality. Instead of only leveraging food cost pricing, enjoy meals at restaurants competing with yours. This will ensure you offer unbeatable value, beyond just the quantity of food or lowest price, but also in quality to your patrons. Omit currency symbols from your menu Here's a fascinating psychological fact: patrons are inclined to spend more if the menu they're ordering from lacks currency symbols (such as dollars or euros). This happens because currency symbols are mentally associated with expenses, thus making ordering from a menu featuring such symbols seem like a purchase. This effect is mitigated when these symbols are omitted. Taking away currency symbols from your menu won't immediately transform your customers into high spenders, but it does subtly and noticeably influence their readiness to order dishes that they'd typically consider beyond their budget. If your restaurant offers premium dishes priced as such, leaving out currency symbols from your menu could diminish the mental cost associated with ordering such items. As a result, customers might end up spending more on average. Offer a variety of dishes at varying prices Top-performing restaurants usually have a variety of dishes at different prices to cater to a broad audience. For instance, a restaurant could offer some main dishes at $50 while providing a variety of cheaper options ranging from $25 to $40. Presenting a vast selection of prices provides your customers with a wider array of choices. It can also enhance your restaurant's affordability perception due to the availability of less expensive items that balance the menu. While most people won't generally go for the cheapest options on your menu, just having these options creates a psychological impact, making your restaurant seem more affordable and competitively priced. This tactic is often employed in drinks menus and wine lists, where a budget-friendly bottle of wine is utilized to establish the lower end of the menu, enhancing the likelihood of patrons ordering medium-priced items.