HotOperator® Restaurant Menu Builder

The HotOperator® Menu Design & Engineering Process

This is a short video that explains a little behind the scenes of how HotOperator makes a menu. There are a lot of ways to develop a restaurant menu today, but not all of them are as objective or painstaking as ours. I've been asked recently if we have a cheap or nearly free option, and there are places to go for that kind of menu. Sadly, what I hear back from restaurant operators who have used them is that their food costs are out of whack, or that their profits are down considerably.

 

Keep in mind, when you get a free menu, or when it is discounted significantly, there is still a cost associated with the work that is done. And you either knowingly pay for it or you don't, but either way you're paying for the menu.

 

 

 

Thanks for taking time to watch my video. If you would like to get started on a menu project, click the Quick Start!

Advertise Or Die

Early in my career in advertising my agency represented Pierce Manufacturing. Pierce makes fire trucks, some of the best in the industry. I had mentioned to them that if we increased their advertising budget by $15,000.00 to place ads in two industry directories we could lift their sales. At the time they were owned by a bank, and the chief marketing office, who was a banker, asked what he thought was a logical question: “If I spend the money, how many more trucks will I sell and when can I expect the first order? And if you can tell me that in monthly sales, that would be great.” I told him that I actually could tell him that, but it would cost another $50,000.00 to figure it out. Needless to say, he didn’t place the ads.

 

Working with restaurant operators is not much different. I get asked all the time how I can prove that menu marketing works. Or they say they want to do a little and then test to see if it worked. Research is what they want to do. Build me half a bridge, and if I like going across it, maybe I’ll build the rest.

 

And while the independent restaurant industry lost ground last quarter by this same, small-minded thinking, the big chains got bigger. In 2008 McDonald’s spent $1.2B in advertising. Yum Brands! Spent just under a billion. And Subway, Wendy’s/Arby’s and Burger King spent just under half a billion. To be sure each of them sincerely hopes the independent restaurant community continues to do it all themselves. They will tell you: yes, do the research; don’t advertise; don’t hire a professional and partner with them. Instead do what the other independents have done over the years and follow them into an early grave.

Putting the Cart Before the Horse

Over the years I’ve tried to make menu engineering as easy as possible without leaving out critical parts of the process. My first attempts were cumbersome, since few people knew how to engineer a menu. When I started engineering menus back in the early ‘90s, it took nearly 50 hours on average. But over the years we’ve been able to reduce the process by more than half in terms of time, without losing any of the critical steps. In fact, the menus we’re engineering today are much better than those in the past, because we’re learning new processes with nearly every menu we produce.

 

Here is a list of steps to follow for developing a new menu:

 

1.     Ongoing:  Keep notes of menu ideas and suggestions that arise over time.

2.     Review sales velocity reports at least monthly – develop a review every quarter and update the menu as needed.

3.     Review food cost and plate contribution on each item at least monthly.

4.     Build a straw man (layout) menu for engineering only.

5.     Hire a great designer and give him or her a rough sketch of how you want your menu engineered (don’t leave critical decisions like product placement and highlighting to the designer).

6.     Set the tone for the graphic representation of your menu with the cover layouts first; then incorporate the design you choose into the rest of the menu. Many operators make the mistake of having the menu designed all at once, and then when they make changes it can be very costly. Taking the time to engineer the menu first and build the graphics after is much more cost effective.

Then have your graphic designer finish the piece with complete graphics, but only after the cover design has been decided and you are sure you have the engineering complete.

 

Quick Start? Click Here

From Aaron Webb at Wubba's BBQ

 

Hi Mark!

I just wanted to say I really enjoyed the article in RS&G. I had a colleague congratulate me on it and to my surprise as I have been so busy I'm behind on my reading. Busy is good and with the extra profits we're taking in thanks to you and your team I think our bank account is starting to grow. I recommended they call you right away and hopefully they will or have already. I also showed our food Rep and told him to show it to his other customers that have been scared to raise prices and instead have been cramming discounts down everyone's throats. All the while people always comment on how packed our parking lot is (not trying to brag we've been very fortunate thus far)....

 

 

No Risk Guarantee

With so many options for consumers and seemingly so few consumers today, it’s important to offer some assurance that what they ordered they would get and that they will be satisfied with their meal. There are any number of restaurant consultants saying the same thing, and while it may seem like old-school, we preach it because it works: It’s the best you’ve ever had or it’s free; or offers similar to that make your brand seem more impressive and make your guests feel more comfortable trading up.

 

Of course, there are those in the restaurant business who will insist that a money back guarantee will be taken advantage of, that their customers will eat and then say they didn’t like it. But that’s an easy fix, just ad a simple disclaimer: we’ll buy back anything you didn’t eat.  So if the customer ate most of it and then decided they didn’t want it, you’re covered. In this way, the guest gets the idea that you are serious about wanting them to have a great time and be happy with their order, and at the same time you’re not one to be trifled with.

 

HotOperator can help with your guarantee, to contact them click here

Avoid A Menu Downward Spiral

I’ve been in menu development for more than a decade and in the foodservice business since 1988, and the one thing that seems to vex restaurant operators more than any other is what I call the Downward Spiral, and it goes like this:

 

The restaurant opens and it seems profitable. Then about a year into it, maybe longer, the operator gets to thinking it might be time to update the menu. So she starts to pay attention to what seems to be selling and what doesn’t more closely than usual. Much to her dismay, she notices that the most expensive items on the menu aren’t selling particularly well, and she reasons that anything over a certain price point just doesn’t sell, so she takes those items off the menu.

 

And of course she’s right. The most expensive items are the toughest to sell in most restaurants. But now, the most expensive items are just over $10.00 rather than $15.00, and guess what? The next most expensive item starts to slow down. Then, about six months goes by, and she notices that the items over ten bucks are not selling well, so she reasons that her customers are really getting cheap. And she decides that nothing over ten bucks will sell in her restaurant.

 

The problem isn’t that customers are getting cheap, it’s that they are doing what they always do. They’re subconsciously comparing the most expensive item to the least and hovering at about the 75 percentile. And by stepping down the price of the items on the menu over time, the operator is spiraling their average check down, and down, and down.

 

The solution to this problem is really simple. Rather than take the most expensive items off the menu, instead, go the other way. Not with everything, mind you, but with items that actually have a value at the higher end of the scale. And be ok with the fact that these items may not sell that well, and you may have to run a special on them from time to time to clear out the inventory.

Book-Style vs. Gatefold Menu Style

One question I get a lot when developing a menu is: “What style of menu jacket should I use?” And the answer to that question really depends on how many items you offer. In the case of Butterfield’s, with more than 150 items on the menu, we needed a lot of space. We recommended an 8.5-inch x 14-inch six-view menu with a custom cover. Actually, we had recommended an 8.5-inch x 14-inch six-view café-style cover, but the Butterfield’s partners fell in love with a bright orange, textured and foil-stamped cover that resembles orange skin.

 

The reason we like the gatefold style better is that there is less wasted space. The problem with a book-style menu with that many pages is that the customer can get hung up on a page and never make it all the way through the menu.

Mark & HotOperator can be reached here

Restaurant Menu Profit Building

 

I recently read a blog posting that mentioned Cracker Barrel had not discounted at all through the economic downturn and never suffered a loss in customer visits. So I went there to investigate a little on my own. What I found was that almost nothing on the menu is over ten bucks. So the question becomes: How can you discount products that are already dirt-cheap? It’s like having an annual sale at Walmart.

 

When I developed the matrix for Butterfield’s, I discovered something similar. First, their sales are very strong. Second, their profits are very tight. The difference at most dinner restaurants between a star item and a cash cow is usually $3.00 to $4.00, and I’ve seen them as high as $20.00. At Butterfield’s the difference is more like $1.25 and $2.50.

 

So when you think of the restaurant business as a pennies-driven business, this is the poster child. To be successful with our menu makeover, we had to focus our efforts on getting customers to try items that offer a little adventure in order to help take the check averages up.

 

In a recent Business Intel in Nation’s Restaurant News, Ron Shaich, the former CEO of Panera Bread, offered sage advice about menus and how to approach them. He suggested being a “contrarian” when it comes to restaurant menu development, and in this case, that meant positioning, highlighting, mental anchoring and strategically pricing the items with the highest potential to build revenue.

 

To uncover the gems in the business as well as the dogs, we developed a Menu Matrix which breaks everything sold in a period of time into one of four categories: stars – items with a high profit and popularity; puzzles – items with a high profit and relatively low popularity; cash cows – items that sell well, but underperform in the profit arena; and dogs, items that are both underselling and low profit.

Names For Restaurant Products

What’s in a name?

 

Everything, that’s what. What your new product is called will have a huge impact on how well it will sell. In fact, it can be the difference between success and failure. And countless psychologists have tested and studied the impact of how people act around and think about food. Penn & Teller just recently did a documentary to debunk the notion that fast food chains are somehow using sinister techniques to keep people addicted to their food.

 

In one of the scenes, Penn & Teller met with Dr. Brian Wansik from Cornel University who used KFC products to make soup and then served it in really fancy dishes and told participants in a focus group that the products were made by a top chef. Dr. Wansik then asked what they thought about what they had just eaten. The result is just what you might expect. They all thought the soup was excellent, and of the highest quality ingredients.  Which of course is true: KFC uses great ingredients worthy of any white tablecloth restaurant, right? Sorry, that was sarcasm.

 

Here’s an experiment you can try: Bake a pie. You can even use a frozen pie if you like, but you will want to bake it fresh so it’s warm out of the oven when you serve it to your focus group.

 

Once the pie has cooled enough to cut, place slices on two different style plates. Then tell your focus group participants that one slice is regular apple pie a la mode. We’ll call that slice A. Next; tell these same people that the other pie sample is Grandma Lee’s Before The War Pie. Tell them that General Lee had a grandmother who made terrific apple pie. And wherever General Lee went, he always had that recipe with him and insisted that every baker who ever baked for him had to use that recipe. In fact, when he died, he had that recipe in his lapel pocket.

 

After you tell the story, allow your focus group to try both slices of pie and ask for their impression. What will happen next will surprise you. They will see a difference in the pies. But hold on, it gets better. Once you’re finished with the experiment, tell them the truth, that you made it all up and see what happens. They won’t believe you. They’ll stick to their initial view and insist that there is a vast difference between the two slices of pie. I know this, because I’ve done this very experiment and nearly got lynched. On second thought, maybe you should just take my word for it.

 

Here are some tips for naming and positioning your new product:

 

Use easy to say and read words that describe the product clearly.

 

Avoid clumsy language that may be hard to say or pronounce. Your customers, especially men, will avoid the items if they think for a moment they will look like a fool, especially a man in front of a woman.

 

Borrow, but don’t steal. It’s OK to borrow a part of another name and build off of it but don’t blatantly steal it. It’s not flattery it’s theft.

 

Use group think: allow a lot of people to offer suggestions and then select the name.

 

Get a Thesaurus.

 

Free-associate your product with names of similar items and ingredients.

 

Ask an expert – especially if you’re naming an item with a foreign language. An expert can tell you if you’re embarrassing yourself.

 

Surf the web – both to get ideas and to search the name you’ve just come up with.

 

KISS – keep it simple stupid coined by Kelly Johnson, lead engineer at the Lockheed Skink Works really applies here.

 

Let your name be hijacked. Alex Wipperfurth in his book “The Brand Hijack” has some great advice about how to allow your customers to run away with your idea. And once your customers are engaged enough to take ownership of your product, you know you’ve hit a homerun!

 

Live with it for a while. When we named Poppers, the client hated it at first. But the name stuck and over time, they began to like it, especially as the brand and profits grew.

Call HotOperator and ask for Mark @ 1-800-316-3198 X332 or email us at mlaux@laux.com

People Want Something They Already Love In A New Form

People like what they already know they like, in a new form.

 

Burger King launched “New Ribs” this past spring. Did that mean ribs are new? Perhaps they’ve never heard of Famous Dave? No, wait, Dave is Famous, it’s even in the name of the restaurant, so they must have heard of him. So it couldn’t be that the ribs are new. McRib, that was Mc Donald’s take on the rib, and it was new, too. So they must mean something else.

 

How about this: the ribs were new to Burger King. How much you wanna bet that’s what they meant? And if you followed the ribs at Burger King, you’ll know it was pretty successful right up until they couldn’t keep up with demand.

 

The key to a great new introduction is to package what your customers already love in a new form, in this example ribs at Burger King. There are a number of ways to go about this, but for the most part, you need to make sure what you introduce makes sense for your business and your concept without sacrificing what you’re already selling. It does you absolutely no good to introduce a new item only to have it cannibalize your current success. The idea is to create new success and maintain your current popularity.

 

I worked with the fine folks at Wells’ Dairy, Blue Bunny for many years, and they told a story about how they had gone to visit Outback Steakhouse with an idea for a new dessert product. The CEO of Outback at the time came into the meeting and told the group from Blue Bunny before they started their presentation that if they did anything to hurt the Bloomin’ onion business that he would hunt them all down and kill them in the street like dogs. That might be an exaggeration, but the point is: he understood his business was centered not simply on great steaks, but also on the onion that brought in nearly five bucks with every table rotation.

 

So what’s your onion? What is it that your customers come to you for? If you can’t answer that question first, you’ll want to put off any new product effort until you can.