What came first, the chicken or the egg? It’s an annoying and funny question at the same time, which sparks a never-ending controversy. Yet, what nobody can actually deny is that you can’t have one without the other, right? There’s no chicken without the egg, and vice versa. So where am I heading with this analogy? Well, similarly, when your clients order food from you, they want to order as much food as possible, yet they’re afraid of the horrid consequence: having to give away a lot of money from their paycheck to pay for their meal. And nobody wants that, for sure. So then the following question arises: how can you get them to order more food from you without thinking about the price?Hmmm... What to do, what to do? Well, that’s where the power of menu engineering comes into play and saves the day, yet once again. See, marketers didn’t just use secret psychological tricks to persuade more of their clients into buying more food. They’ve also done it to alleviate their clients’ existing pain of paying. This type of fear can actually be traced back to one of the primary needs of the human being: the fear of loss (an innate, primary need).The fear of losing their money is what makes them tick and pushes them towards taking some sort of action. However, in 99.9% of the cases, it’s NOT the one that you want them to.The fear of overpaying can actually make your customers hit the brakes and curb their desire of eating overpriced foods or ordering multiple dishes. And this fear is quite possibly YOUR clients’ biggest pain point when ordering food online or dining out. So what you need to be doing is actually make them think: “Wallet? What wallet?”But how can you do that? The solution? Counteract their fear of losing money and appeal to their wish to acquire bargains (the learned or secondary need)... since everyone likes a good deal. So it's pretty much like swapping the smoking addiction with the sugar addiction. But you're probably wondering how exactly you can do that.
Here's the step-by-step course of action that you should engage in: Customers assess the fairness of your food prices all the time. And if they perceive your product as being too expensive (or too low, for that matter), then that will greatly influence the size of their order. And that will plummet your sales. Right now, you may be wondering: Ok, so, what should I do? Well, the answer is simple, really. To save your restaurant sales from taking a serious hit, you should tell people why your prices are too low or too expensive.
Restaurant Menu Pricing Method #1:
Highlight the Inherent Price of Your Food
So, for example if you need to charge more because you’re using organic products, say so. Customers perceive your more expensive prices to be fair when they know about the cost of materials. This is known as cost-based pricing. A market study conducted by in 2004 reveals that:
( Xia, Monroe & Cox)
“…consumers have little knowledge of a seller’sactual costs and profit margins…Therefore,sellers’ making the relevant cost and qualityinformation transparent helps.”
So being honest and transparent about your cost of materials helps.
Restaurant Menu Pricing Method #2:
Choose Price Numbers Which Have Fewer Syllables
Coulter, Choi, and Monroe (2012) published a study in the Journal of Consumer Psychology revealing that the auditory version of your price influences price appreciation. This has to do with a little concept called price magnitude perception, which states that there is a strong link between between syllabic length and numerical magnitude. The more spoken sounds a price number has, the bigger the price perceived by your customers. Here’s why: the more syllables a number has, the more mental resources we have to allocate to process that number. And so, we falsely attribute it a bigger magnitude. However, on the other hand, your customers use less mental resources and perceive prices to be smaller when the numbers they see on the menu in front of them have less syllables.
Restaurant Menu Pricing Method #3:
Use Expensive Decoy Food at the Top of the Menu
The cheeky owners have actually used the restaurant menu psychology to deem a new concept, which most menu engineers informally call “decoy dishes”.
What they do is trick their customers into ordering a whole lot of food, by positioning a more expensive food item at the very top of the menu. Seeing an expensive dish of sea bass seasoned with different herbs and spices andmarinated in a fancy sauce - all for $25 - can have quite a powerful impact on the customer.
He’ll actually be inclined to choose some of your other, cheaper dishes, because he’ll get a better value for his money. Or to put informally - he’ll feel that he’ll get more bling for lesscha-ching.
And who doesn’t like a great deal? This will also make him feel that can splurge a little and maybe even order some dessert, alongside his main course.
Restaurant Menu Pricing Method #4:
Use The Power of Charm Pricing
Using decimals and reducing the left digit of your base number by one (i.e., £20 becomes £19.99) is a common psychology pricing tactic that you can also see it in supermarkets, listed on almost all pricing labels. The reason why marketers call this “charm pricing” is because it can greatly increase conversion.However, beware: charm pricing is extremely effective when the left digit of your base number changes. So, for example, a one-cent difference between £1.99 and £1.98 won’t actually be notable to the customer. However, a one-pence drop between £2 and £1.99 actually turns into a pretty significant difference. So depending on how you choose to use it, you can become penny wise or penny foolish. The simple explanation behind it? It has to do with price magnitude.
Restaurant Menu Pricing Method #5:
Delete the Currency Sign
Whether it’s eating out or ordering in, the paying bit is the part that makes us suffer the
most. So here’s a nugget of wisdom: what you need to do is remove the focus from your
Essentially, this will also help take the spotlight away from the total cost of the food that
Therefore, to make the most use of the restaurant menu psychology, make sure you hide or
delete the currency sign that accompanies your pricing number
Restaurant Menu Pricing Method #6:
Charge Clients Before Consuming
Charging your customers before actually eating your food is something that benefits both
you and your clients.
The main reason for this is because they will be happier with what you deliver to them.
When your clients pay in advance, they focus more on what they do get (so on the benefit
of eating good food) than on what they lose (the money in their wallet).
According to Prelec & Lowenstein (1998), getting them to focus on the benefits actually
numbs your customers’ fear of losing their money.
So you need to make them looking forward to receiving the food they just ordered and
focusing on the positive, instead of intensifying the negative aspect of ordering food.
That would be pretty much like twisting the knife or adding insult to injury. And that is
precisely what you’re trying to avoid.
So that’s why having an online ordering system in place and allowing people to pay online
actually takes the heat off from having to pay for their food.
Win-win for both you and your customers.
These menu pricing tactics are quite possibly the best thing since sliced bread.
And when your friends are going to come by your restaurant and look around, they will be
surprised to see a lot of plates sitting on people’s tables. And they won’t be able to stop
asking you “how come are these people ordering so much food?”
But don’t worry, we won’t say you’ve used our menu pricing suggestions. In fact, we will let
you steal all the glory.