Good afternoon TT,
Just thought I would share this menu pricing best practice as I receive several messages per week related to menu design, profitability, bundling, and pricing. This simple consideration can be applied to virtually any menu without causing significant issues among current customers.
Keep in mind, a restaurant that sells 2,500 (of any item) per week can increase sales by $5,000+ per year – just by changing rates from $X.95 to $X.99.
Basic Price Rounding Strategy
-Items less than $5 should feature increments of ($.29, $.59, $.79, $.99)
-Items more than $5 should feature increments of ($.49, $.99)
Incremental price increases move items to the next highest price point, ie., $7.49 to $7.99. At the psychological level, the customer is unlikely to notice the increased price when managed in this incremental format. A more noticeable change (and bad example) would be listing prices at $7.50 and $8.25. This type of price increase can function as a red flag for most savvy customers.
If you want to read the full article I posted about this, you can check it out here.
I hope this information is useful. You can reach me via PM or at the office if you need help with your direct marketing / menu strategy.
-Chris
Just thought I would share this menu pricing best practice as I receive several messages per week related to menu design, profitability, bundling, and pricing. This simple consideration can be applied to virtually any menu without causing significant issues among current customers.
Keep in mind, a restaurant that sells 2,500 (of any item) per week can increase sales by $5,000+ per year – just by changing rates from $X.95 to $X.99.
Basic Price Rounding Strategy
-Items less than $5 should feature increments of ($.29, $.59, $.79, $.99)
-Items more than $5 should feature increments of ($.49, $.99)
Incremental price increases move items to the next highest price point, ie., $7.49 to $7.99. At the psychological level, the customer is unlikely to notice the increased price when managed in this incremental format. A more noticeable change (and bad example) would be listing prices at $7.50 and $8.25. This type of price increase can function as a red flag for most savvy customers.
If you want to read the full article I posted about this, you can check it out here.
I hope this information is useful. You can reach me via PM or at the office if you need help with your direct marketing / menu strategy.
-Chris
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