The Price is Right
The almighty price is a big factor on menus, not just the value itself, but how it’s presented. Here’s a few strategies to consider:
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Price Point Justification Move your prices into your descriptions to avoid price-shopping by customers. Using the same typeface (or slightly smaller) and removing the dollar sign can further help the customer focus on the product, not the price*.
*Based on a Cornell study on ‘Menu Pricing’ published in the International Journal of Hospitality Management (28:1).
In a nutshell, without the dollar sign, the monetary value of items have less weight, and diners will spend more.
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Anchors Away Basically the theory goes, have a very expensive item next to cheaper high-profit items, to make the cheaper ones seem more cheap by comparison. This increases sales of the cheaper high-profit items.
Price “anchoring” comes from a cognitive phenomenon discovered by psychologists Daniel Kahneman and Amos Tversky in the 70’s. It asserts that when we try to estimate a numerical value, we are unconsciously influenced by the related numbers around it. If you’ve ever been to a Prada store you’ll be familiar with this technique already.
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Above 5, add 95 Since pricing increments of less than $1 don’t change the value of perception, for an item that is priced at more than $5 add $0.95 on any item that’s more than $5. For example, since $13.50 and $13.95 have the same perceived value, go with $13.95 to maximize your profits.
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Follow the Leader In regards to removing the leader dots (the dots that lead up a price) while it was fashionable in the 90’s to remove these, the trend now is moving back towards retro-style classic menus. And the limited studies done on price placement makes this option worth considering, especially if your restaurant appeals to younger diners. There’s something comforting about the old school approach and younger, more savvy diners on are already hip to price tip number #1 and appreciate the honesty of classic leader dots.
