Menu Innovation: A Case Study
A leading restaurant chain reinvented their menu.
- Over time, their menu had grown larger and more complex – mirroring the category in general.
- Past menu item changes had been time consuming, expensive, and error prone.
- For an upcoming menu change, APT's Menu Analyzer was employed to evaluate which items should be promoted, improved, or deleted.
The Company
A leading restaurant brand
The Challenge
Having relied on less comprehensive approaches to menu changes in the past, a leading restaurant chain wanted to bring a guest-oriented, data-driven perspective to this critical process. The goal was clear: simplify the menu by focusing on items that build guest loyalty. The challenge was making sense of the wide range of available data, including detailed check data, guest information/segmentation, and guest satisfaction surveys to make specific decisions about each item.
The Solution
Using APT's Menu Analyzer, the client created a complete view of each menu item. For each item, this included data such as:
- Frequency of purchase
- Margin contribution of the item
- Margin contribution of the rest of the check, for checks where the items were present (and composition of the "rest of check")
- Loyalty of guests to that item (vs. other menu items)
- Likelihood of guests ordering the item to return
- Guest satisfaction with the food
Going one step further, the client also compiled the same set of statistics for different segments of guests. As with many consumer companies, a relatively small number of guests contribute a disproportionate number of visits. Recognizing this fact as well as the desire to grow specific new segments of customers, our clients examined the same set of facts for checks of:
- High vs. low guest frequency
- Larger parties vs smaller parties
- Day-part segments (i.e. lunch vs. dinner)
- Week-part segments (i.e. weekday vs. weekend)
- Geographical segments
The Results
With these menu-item data in hand, the decision process was rigorous but efficient. Culinary decision makers were able to determine where to delete, re-formulate, and innovate. The physical menu was rewritten to focus on items with the highest total value. Finally, marketing was able to focus promotions and media on items likely to create more loyal guests over time.
