COMMENTARY

7 shortcuts to higher profits via menu board optimization

7 shortcuts to higher profits via menu board optimization

By Tom Cook, principal, King-Casey

Designing a menu that communicates critical menu elements to simplify the customer purchase process isn't easy, but there is a tool that can help; the optimized menu board. 

Research shows that 56 percent of customers can be influenced by the menu board, about About 74 percent said than an easy-to-read menu board is their top priority. The CEO of a QSR chain recently told us that: "Menu board optimization is one of the best investments my company can make.  It far exceeds almost any other strategy I could pursue to increase profits."

So why do so many menu boards underperform?  One big reason is that they are strategically weak. They don't incorporate business objectives or take into consideration how customers actually use menu boards.  Effective menu board design follows a structured, analytical approach that is much more than a graphic exercise.  Our firm has identified seven truths that collectively result in world-class menu board strategy and design.

1. Leverage hot spots
"Hot spots" are where customers tend to look first and most frequently.  This is where your best-selling, highest-margin and high-priority menu items should be placed.  Hot Spots on interior menu boards differ from those on the drive-thru menu board.  On the interior version, the Hot Spots can also vary depending on how customers line up and where the primary order point is located (typically near the cash registers). The power of hot spots is evidenced by the fact that Popeyes Louisiana Kitchen seafood sales doubled as a result of leveraging their menu board hot spots.

2. Evaluate real estate
Conduct a "sales-to-space" analysis to determine if the ideal amount of menu board "real estate" is devoted to your best-selling items.  It makes simple sense that these items, as well as your high dollar margin items, should get more space on the menu board.  Per the example below, use your sales analysis to create an all-text schematic of your current menu board.  Then ask the critical question: does a category's percent contribution to sales have at least a one-to-one relationship to the percentage of real estate it occupies?  Take a look at the dramatic "before" and "after" changes in the example.

3. Location, location, location
All brands track sales, but it is astonishing how few use this data to help them create a strategic menu board layout.  Just as best-selling, higher margin items should have more real estate, they should also enjoy more prominent placement.  Create a spreadsheet of your annual sales, then sort this list by sales and margin percentages.  What percentage of total sales and margin does each of the top 5-10 items represent?  Sort this list by category for organizational purposes.  Do this analysis for all products on your menu board.  This information, as outlined in the example below, will enable you to better position key items on the menu board. Using this approach, Moe's Southwest Grill was able to shift product mix considerably to their business driver menu items.



4.  Launch, sustain and coddle the core
These three imperatives give you a strategy to deal with menu board content changes:

Launch: Your menu board strategy should allow space for introducing new items. In fact, research shows that establishing a designated area of the menu board for new product introductions is helpful to customers.They get used to the idea of looking in a specific place to see "what's new." LTOs and seasonal items should also be featured here.

Sustain: Where do successful new products get placed after a successful launch?  Is it a "zero-sum" game, which means that less successful items need to be deleted from the menu board?  An optimized menu board strategy takes these issues into consideration.
Coddle the Core: Such a strategy also addresses your core items — the products that drive your business and account for the majority of your sales and profits.  These listings should never be compromised when new items are added. Core items should always be the "hero" of the menu board, occupying the space and locational prominence mentioned above.

5. Think like a customer
Menu board design should reflect how your customers order their meals. Research can help get at this information and enable you to think like a customer.  For example, what do they order first, second, third?  As the example below indicates, your item offering sequence should sync with a customer's ordering sequence.  



6. Brand it
Great branding is more than a logo.  It should extend to every aspect of the business that involves the customer, especially the menu board.  Doing so will heighten a customer's trust and overall experience.  When designing a branded menu board, never forget that your number one priority is simplicity and ease-of-use.  Don't get carried away with clever designs and superfluous graphic details. Your customer wants something that is easy to read and navigate.

7. Measure it
Metrics matter. Now that you have optimized your menu board, it is time to measure the success of your efforts. Look for sales, margin and ticket increases, improved throughput, improved customer satisfaction and, equally important, happier franchisees. This is another area where the "Research Primer" noted above can be a big help.


   
 


Topics: Menu Boards, Operations Management


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