Price

Mopping up after your competitor's mistake.

Years ago in the early 90's, at the height of my parents' nightclub success, I watched their business continue to flourish despite a distinct lack of re-investment on their part together with the growing challenge of some swanky new clubs opening in the town of Bedford around that time. To my mind, it just seemed to defy logic.

As he mopped the floor after one particularly busy weekend, I put the question to my Dad; "How come the 'Irish Club' still packs them in every week, while all these new clubs with their million-pound investments and top DJs seem to fizzle out after only a few months and we get all our regulars back?"

He took a break from mopping the floor for a minute and gave me a terrific insight into how any business should assess their customer proposition.

"Here's how I look at it," he said, "a fella leaves the house on a Saturday night and he has £35 to spend. It costs £3.50 for the taxi into town and he keeps £4.50 aside for the ride home. He'll want a bit of grub to eat later on too, so he'll set aside another £3 for that. So that's £11 on food and taxis which leaves him with £24 to spend on drink.
He meets the lads in the pub and a pint costs £2.50, so he either sticks to buying his own or buys a round for his four mates and altogether spends between £12 and £14 before heading for the nightclub."

"Now our friend has a choice... does he choose the flashy new club where it's one entry price before 11pm and a higher one after (but free for ladies before midnight, and a different price after that again). "

"And even if he does choose to go in there with the lads, once he gets to the bar - with a tenner left in his pocket at this stage - he discovers the drinks are one price before 11:30pm but suddenly go up afterwards. So at any given time, this lad doesn't know for certain what he can get for his £10. It also means every round will be a different price for each of those fellas because of these so-called offers. And with all that investment, you can be sure it ain't cheap!"

"Or... he can come to our door and if he's a member come in for free (EVERYONE was a member back then). Once he's in, he knows that every drink whether it's a pint, a bottle of beer, a shot, a short and or an alcopop is £2 all night. So that guy with the tenner in his pocket can confidently walk up to the bar and buy a round for himself and his 4 mates without having to worry about looking an eejit or tapping into that burger money he's saving for later on."

As my Dad went back to mopping the floor, I realised that all the 'smart money' being poured into these new nightclub ventures was being wasted as long as they continued focusing on the wrong aspect of their customer experience. It didn't matter about the flashy DJs, state-of-the-art lighting systems or fantastic mixologists, who generally pull pints in Bedford, if all they REALLY have to offer is uncertainty.

Customers need to know where they stand so they can make an informed decision. Without it, they'll just go and queue somewhere else.

Menu Engineering: The Power of 'Recommended'


This post is part of a series to help you build a winning menu that will engage with your customers, assist your team and most importantly, drive your bottom line.

In a previous post, I talked about the importance of having a great introduction on your menu. Suddenly, this gives the feeling of having a conversation with the owner. Now, you ask, which dishes should I try to further the experience. 

The best way is to highlight certain dishes is with a ‘Recommended’ symbol. But it is a minefield. Yes, they have to be dishes that will work best for your business in terms of revenue, but they also have to work for the guest in terms of quality. Balancing that customer satisfaction with meeting the targets of your bottom line is a very tricky business. 


A great example of Recommendations influencing choice.
To start with, every chef will say that ALL the dishes on their menu are good and will naturally gravitate towards the ones they like to eat. But let’s take a hard-nosed approach for a change..

Here are the key questions that you need to ask in deciding a recommended dish:

Which dishes are super-popular and bring people back for more?
A bit obvious, but surprisingly it’s not necessarily the dish the Chef thinks it is. He might think it’s his fantastic Duck a la whatever-he-calls-it, when in fact it’s the lemon tart served after he’s gone home. That’s why patissier’s rule!
Which dishes are really straightforward to prepare in terms of mise-en-place?
The dish looks good in terms of food cost, but it might be killing your labour budget. At St Cross College, our chef loves to serve soup for big functions. Makes sense… doesn’t it? The problem is a waiter can only carry two bowls to a table, so I need more staff. By encouraging the chef to change to a risotto for example, the waiter can carry 3 bowls. Now we can serve 120 guests with fewer staff.
Which dishes are easiest to dress on or have plated during service?
Prepare for success by making sure you don’t get a traffic jam at the stove. It may be popular with the guests, but not if they have to wait for an hour for it to be served.
Which dishes use the least expensive ingredients?
Sometimes a dish can be just that simple; cheap and easy to prepare. Nursery dishes and homely classics will never go out of fashion it seems. So don’t overlook them in favour of celebrity ingredients.
In terms of dietary requirements, which dishes appeal to the widest audience?
This is especially true in banqueting or for weddings where pork, shellfish, beef, horse (couldn’t resist) or fois gras are best avoided, unless of course you know your audience really well.
Which dishes are priced the most expensive on the menu?
One lesson I learned in my restaurants in Kathmandu is that people love to show off. To flaunt their wealth. So let them. Sometimes it does make sense to recommend the most expensive dish.
Here’s a sneaky one: which dish requires one or two sides to make it complete?
The dish itself might seem reasonably priced, but throw in a couple of sides and your bottom line is looking good. Sound familiar?
Another bonus one: Which dishes offer supplementary upgrades? e.g. Prawn vs Lobster Surf n’ Turf?
So you recommend the basic version and allow guests to ‘upgrade’ if they wish. What’s wrong with that?
And would the Chef know which dishes promote the sale of some great wines?
This is where good restaurants become great. Involving the sommelier, the maitre d’ and the chef in the conversation will really drive sales. A very delicate terrine, will encourage the sale of a Premier Cru in the hands of the right Sommelier. But if you allow the Chef to recommend his homely soup, which probably is great and ticks lots of boxes, you do lose the opportunity to upsell on your wine.

I know there are a lot of analytical tools out there to help you arrive at the right recommendation list, but here’s what we did at my place in Kathmandu. We monitored sales over a six week period. Then we costed EVERY SINGLE dish. Next we got the Heads of Kitchen, Dining Room, Bar and Accounts around a table and we thrashed out the merits of each dish on whether it should be recommended or not. 

What we learned was that, our two most popular main courses happened to be our least profitable. (And it’s hard to put the price up when competing with the hundreds of restaurants nearby). We decided to keep them as ‘Recommended’ because people would choose them anyway, and they’ll come back for more if they do. However we offset that with a couple of delicious starters that were surprisingly inexpensive to produce. Our secret weapon however is our dessert menu which we believe is the real differentiator between us and our competitors in Kathmandu. That will be the subject for another post soon.

Series: The Art of Menu Engineering


This post is part of a series to help you build a winning menu that will engage with your customers, assist your team and most importantly, drive your bottom line.


I work with lots of very passionate chefs who love to cook great dishes from locally sourced food and in return we are rewarded with really happy customers. So when those chefs talk to each other about menu engineering in our food trend workshops, they speak from a position of knowledge and experience. 


http://www.seattlepi.com/lifestyle/food/article/How-French-Laundry-s-chefs-reach-for-the-stars-897378.php
Time and again, terms like menu-busters; food heroes; increasing GP (gross profit); achieving margin (pretty much the same thing) and even up-selling or cross-selling are thrown in and we all go home feeling warm and fuzzy because we feel we've learned a valuable commercial lesson. What strikes me though, is that I don’t see the front of house guys in this conversation. Nor have we considered asking the marketing or retail-experienced guys what they might think.

So here’s a fundamental question I have for any chef who wants to practice or teach menu engineering: have you owned your own business and relied on that same menu structure to meet rent and payroll at month-end? Rarely the answer is yes. But one thing is certain, it takes more than menu-busters and margin to create a powerful revenue-driving sales tool that any great menu should be.

Let me take you back 14 years to my experience of shouldering that burden in my new restaurant which had only opened 12 weeks previously at the time. On any given night we were expecting 300 guests in for dinner of mostly trekking and expat groups from all over the world. So far so good, you might say. The thing is, I was the only person in the business who spoke English fluently and in the dining room, many of our customers spoke English as a second language. Yeah, that’s kind of a challenge. 

Now Chef, write me a menu that will sell our food. And our Wine. And Desserts. And Coffee. And breakfast tomorrow. And goes on to create repeat business through word-of-mouth. But most importantly right now, will overcome the waiter’s inability to SELL due to his shyness or his language barrier. When it’s put in those terms, you learn pretty damn quick. 


Chef Gary Jones writes his Lunch Menu 
To begin with, I guess the first question to ask is this: what is Menu Engineering? Well as expected, those boffins at Wikipedia have an answer for that, but they don’t have THE answer. Because that really depends on your business and your customers. What I can do however, is throw some perspective on how I have looked at this conundrum over the years. Up front, it’s about psychology. Behind the scenes however, it’s about growing your profits. 

If your menu is not driving sales, then tear it up and start again. You owe it to yourself, your staff and your investors.

Over the next few posts I want to address these key areas:



Just to be clear about what I mean when I ask, what is a menu?, check out my previous post and then we can look in more detail at some of those key elements in creating a sales tool that works for you.

The Profit's In The Pudding. 

How often have you requested the bill at the 'end' of your meal, without being asked if you would like a dessert by your waiter?

It never fails to surprise me that any restaurant, especially an Indian or Chinese one for example, would pass up the massive opportunity to tap into the profitability that desserts - and liqueur coffees, cognacs or malt whisky - can be to their bottom line.  

Let's think for a moment about the costs involved in selling a steak or even a chicken tikka masala: 
• You have to invest heavily in a marketing campaign to get the customer in the door. 
• You have to invest substantially in the fixtures and fittings to get the venue right. 
• You have to invest in your linen, menu printing, crockery, cutlery and glassware to get the presentation right. 
• You have to ensure great ingredients to get the product right.  
• And you have to invest heavily in your team and your training to get the customer experience to the right standard. 

All this to sell that main course before simply allowing a lazy or incompetent waiter present the bill and letting them walk away without a further sale.    

With just a tiny addition to one or two of the above investments, your ability to sell a dessert makes the enterprise far more profitable, since the hard work has already been done in getting the point of sale already. 
 
With this in mind, lets think about the additional costs of tagging on that dessert on their bill:
• other than an engaging dessert menu, no extra marketing is needed since you all ready have your clientele 'in situ'. (Although more diners will be attracted on the promise of a decent pudding selection to round off their meal.)
• the fixtures and fittings have been admired so nothing extra required there. 
• The additional linen, menu printing, crockery, cutlery or glassware required is negligible since it was required anyway and therefore already in place.  
• There is an added cost due to the extra ingredients required, however this is instantly converted to profitable revenue with each sale. (In fact I would almost consider this an investment  - chefs will disagree, unless they gratefully count the cash at the end of the night.)
• The service staff are already in place. (And with these happier customers consequently paying bigger bills (and therefore leaving bigger tips), they will be highly incentivised to take on board the small additional training required to make that sale.
• And I have yet to meet a chef who does not want to do more with their knowledge and skill in the area of patisserie. Development in this key area could be just the incentive they need to stay longer with your team. 

If you want to enjoy your 'just desserts' through increased dessert revenue, here are three simple rules:
• Mobilise your team: if they believe they have a fabulous product, they will sell it.
• Sell the experience: an engaging menu that tells a story will pique the imagination. (Perhaps you recently served a celebrity... Share that story and people will want to try the dish they had.) 
• Keep it simple: reasonably priced, homemade, classic puds served elegantly will always win through.