How can you measure the success of menu engineering for different segments?

1 How to measure menu engineering

To measure the success of menu engineering, you need to compare the performance of your menu items before and after applying the technique. You can use various metrics, such as contribution margin, sales mix, gross profit, and customer satisfaction. Contribution margin is the difference between the selling price and the food cost of each menu item. It shows how much each item contributes to your overall profit. Sales mix is the percentage of each menu item sold out of the total sales. It shows how popular each item is among your customers. Gross profit is the total revenue minus the total food cost. It shows how profitable your menu is as a whole. Customer satisfaction is the feedback and ratings you receive from your customers. It shows how happy they are with your menu offerings and service quality.

2 How to segment your menu items

To segment your menu items, you need to calculate the contribution margin and sales mix of each item. Then, you need to plot them on a matrix with four quadrants. The horizontal axis represents the sales mix, and the vertical axis represents the contribution margin. The top-right quadrant is the star segment, the bottom-right quadrant is the plowhorse segment, the top-left quadrant is the puzzle segment, and the bottom-left quadrant is the dog segment. You can use different methods to determine the cut-off points for each quadrant, such as the average, median, or quartile values of your data.

3 How to optimize your menu design

To optimize your menu design, you need to apply different strategies for each segment. For the star segment, you want to make your items more visible and attractive on your menu. You can use techniques such as eye magnets, color contrast, pictures, icons, boxes, or descriptive language. For the plowhorse segment, you want to increase your profit margin without losing your customers. You can use techniques such as portion control, ingredient substitution, price increase, or bundling. For the puzzle segment, you want to boost your demand and test your market potential. You can use techniques such as sampling, promotion, recommendation, or repositioning. For the dog segment, you want to reduce your waste and opportunity cost. You can use techniques such as deletion, replacement, or cross-utilization.

4 How to adapt to different segments

To adapt to different segments, you need to consider the preferences and expectations of your target customers. Different segments may have different needs, tastes, budgets, and values. For example, if you cater to a health-conscious segment, you may want to offer more star items that are low in calories, fat, and sugar, and use more organic, fresh, and natural ingredients. If you cater to a value-conscious segment, you may want to offer more plowhorse items that are large in portion, high in quality, and low in price, and use more discounts, coupons, and loyalty programs. If you cater to a novelty-seeking segment, you may want to offer more puzzle items that are unique, creative, and innovative, and use more seasonal, ethnic, and fusion dishes. If you cater to a convenience-oriented segment, you may want to offer more dog items that are fast, easy, and simple, and use more delivery, takeout, and online ordering options.

5 How to monitor and update your menu engineering

To monitor and update your menu engineering, you need to collect and analyze your data regularly. You can use tools such as point-of-sale systems, inventory management systems, customer feedback surveys, or online reviews. You need to track the changes in your menu performance, such as the contribution margin, sales mix, gross profit, and customer satisfaction. You also need to consider the external factors that may affect your menu performance, such as the market trends, customer preferences, competitor actions, or seasonal variations. You need to adjust your menu engineering accordingly, such as adding new items, removing old items, changing prices, or modifying descriptions. You need to test and evaluate your menu engineering results, such as conducting A/B testing, measuring return on investment, or soliciting customer feedback.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?