As Appeared in Nations Restaurant News
Whether your menu communications are hand-held menus, menuboards, kiosks, web-based, digital, or zone merchandising, we all know that menu communications should be well-executed (attractively designed, easy to read, informative). That’s a given. And while these basics are very important, they don’t make the difference between getting good sales results and getting superior results. It’s critical that you first develop a Menu Strategy.
Creating and agreeing on a Menu Strategy is an essential first step in how world-class foodservice communications are developed. It establishes how each category and each menu item will help grow your business. It becomes the blueprint for optimizing communications to maximize sales and profits, speed the order process, and delight your customers.
Having a documented Menu Strategy allows you to:
Establish product and category priorities
Identify what new menu items should be developed, and which current items should be eliminated
Guide how communications should be designed to get the desired business results
How to create a menu strategy
The process for developing a Menu Strategy is like strategic business planning, which is something already well understood by managers: setting goals, prioritizing goals, and translating the plan into specific actions.
When creating a Menu Strategy, a high-level, multi-functional team approach is ideal — you get valuable input across the organization and you get consensus and buy-in from leadership. The team should include key personnel: CEO, CFO, CMO, COO, Foodservice and R&D. The members of the team will be responsible for publishing, implementing, and evaluating the results of the new Menu Strategy.
First, there’s homework to be done. Before the high-level team meets to draft the Menu Strategy, there’s some up-front work that needs to be done. The inputs for this “homework” are varied, and they are all business related:
Review any current menu strategy (if you have one): Identify whatever objectives and strategies you have for your F&B offerings. These may be written down, or you may need to document them. In either event, what you have now will get you started.
Consider a TURF analysis. This process uses consumer research and a statistical process for simplifying the menu. Through TURF (which is an acronym for Total Unduplicated Reach and Frequency), you can identify the shortest list of menu items that will satisfy the majority of your customers.
Review menu pricing. This analysis allows you to develop effective pricing strategies. POS data is analyzed, while consumer purchasing behavior and the impact of price changes are studied at the item level, category level and across categories. Promotional activity is analyzed to calculate the impact on sales, profit, and traffic.
Understand menu performance. This involves taking a deep dive into the data to understand the revenue performance of menu items, and the relationship of items with the purchase of other menu items. This helps understand the specific food and beverage menu items that have the highest attachment potential. Menu communications that feature featuring those frequently paired items can have the highest likelihood of growing sales.
Analyze menu operations. Using menu item operations data and complexity ratings allows brands to determine the items contributing to or distracting from throughput and profitability.
Determine market trends. What are the hot trends within the industry? Is there something you need to add to your menu to address these market needs?
Assess the competition. Develop an understanding of your key competitors’ offerings. How does your current menu compare? Are there threatening disadvantages to your menu that need to be remedied? Does your brand have distinct advantages which should be capitalized? When assessing the competition, focus on your brand’s key competitive set.
Factor in the economic climate. What is the current economic climate? What is the outlook for the next few years? Look at broad economic indicators and consumer trends.
Review technology. What are the latest products out there that could positively impact your Menu Strategy from the standpoint of quality, cost, speed, and customer convenience? Not just technology for operations, but also for how you communicate F&B offerings.
Conduct consumer research. Consumer research is mighty helpful prior to developing an enhanced Menu Strategy. Attitudinal and behavioral research should be used to help understand the thought process behind your customers’ menu decisions. Use this research to identify what’s working well regarding your menu and menu communications. What’s not working well? These represent your opportunities for improvement.
The 6 key steps for developing a menu strategy
With the above inputs in hand, it’s time to draft the Menu Strategy itself. This typically involves a one- or two-day session with the senior level team leading the Menu Strategy project.
The key steps and objectives of the process are as follows:
1. Identify and prioritize your food platforms. List your food platforms and/or categories and put them in the order of strategic importance. Are beverage sales more important to your business than sandwiches? Are sides more important than desserts? This step will require a good understanding of where your sales and profits are coming from now, and where key opportunities lie.
2. Establish business objectives. What are the business objectives you want to accomplish from your menu? Examples might include grow average check; increase sales between the lunch and dinner day part; increase beverage sales; etc. There might be a dozen or more on your wish list. These business objectives should be prioritized in order of importance, which will have the greatest positive impact on the business.
3. Identify “key tactics.” For each of the “business objectives” provide a specific tactical example of how you will accomplish each stated objective. These are the executional things you will do to realize each of your business objectives. There may be more than a single tactic for each of the business objectives.
4. Understand success factors. These are your menu strengths, characteristics, and signature products that your brand is known for and does well. This is what differentiates your brand from the competition. These should be leveraged to your advantage as you develop the Menu Strategy.
5. Understand weaknesses. These are things that you don’t do well from a menu item standpoint. Identifying these in your Menu Strategy helps you circumvent or correct these weaknesses. You may, for example, decide to drop a menu item that is sub-quality to other offerings.
6. Identify risks. These are typically outside forces that could prevent you from reaching your business objectives. An example might include competitors with similar or better products and menu offerings. You need to get these on the table as they may ultimately impact your Menu Strategy.
Menu Strategy output: Optimized menuboards and menu communications
Once there’s agreement regarding your new Menu Strategy, then it’s time to bring in specialists in communication design to develop the look of your menuboards, kiosks, digital, hand-held, web-based, and in-store zone merchandising.
Menu communications that follow a carefully crafted Menu Strategy will allow you to realize the strategic business objectives.
Howland Blackiston is Co-Principal of King-Casey. For more than half a century, King-Casey has been helping restaurant brands grow their businesses and dramatically improve the customer experience. King-Casey’s solutions are firmly grounded in insights derived from hard data and analytics relative to consumer behavior. King-Casey provides a complete range of menu optimization services including assessment, research, menu reengineering, Menu Strategy, and menu communications. www.king-casey.com