Menu changes occur all the time in the restaurant business. You might add an item or two, change the price of existing items, or run a promotion or limited-time offer. All these actions generate, hopefully, the consequences you intended. But, most of the time those actions cause other changes you did not expect. These are the unintended consequences.
As soon as you have made the change you want to measure how your customers are reacting to the new menu. In the worst-case scenario, you might have to roll back the change if you see a strong negative reaction. That does not happen often, thankfully, but many times you will find that additional adjustments are needed to respond to your customer feedback. The sooner you know whether additional adjustments are needed, and what those adjustments are, the better.
So, how do you evaluate the success of a promotion or other menu change?
First, look at the results through the perspective of the customer. In a counter-service restaurant your customer is constantly talking to you through the guest check. They tell you what they like by buying it, and what they don’t like so much by not buying it. But the guest check is more complex than just the quantity sold of an individual menu item like you can see on a product mix report. Rarely does someone go into a restaurant and order one, and only one, menu item. There are usually multiple items involved, a basket of goods like you expect in a grocery store. Changes in the basket of goods are another way your customers are talking to you.
Do you remember that last price increase you put onto selected menu items? You may have been relieved to see that customers kept buying those items at about the same rate. But, did you notice that they saved money by eliminating the drink, or the order of French fries? They swapped how they spent their money, and you may be making less than you were before the price change. Examine every guest check from every restaurant every day. That is how you hear what your customer is telling you. You might think that is an impossible task, and it is if you’re not using exception-based reporting to separate the important data from the unimportant.
Second, look around 360 degrees and not just sales. It is understandable that people focus on the dollar and cent impact of a promotion, but sometimes there is a time lag between the promotion and the reaction of your customers. Those new menu items you introduced last month take a bit longer to put together in the kitchen, and your speed of service is slowing down. It might not even be noticeable at first; all of us can have an off day. But if your customers are repeatedly experiencing slower service, you have given them a reason to go look at your competitors. Combining your drive-thru timers and kitchen display systems with your point of sale data gives you the ability to see how time is affected when specific items are on the check. Look beyond the point of sale to get a more complete picture of how the promotion affected your performance.
Third, the devil is always in the details so make sure you are not looking at just summary data. When faced with the need to process all this data, it is natural to try and simplify the effort by using summary data. The average time, for example, or the average check, are both examples of summary data. Summary data hides a multitude of issues that affect your customer satisfaction. Labor as a percentage of sales is a commonly used summary metric that often gives owners a false sense of security. If the average is fine, they assume that all the individual transactions were very close to that average. That is not a logical assumption. Only by looking at the details of each transaction can you be sure that every one of your customers are receiving the experience you have designed.
Summary
The reason for analyzing your promotions is to eliminate those promotions that are either damaging your customer’s experience, or negatively impacting your profitability or performance. If you cannot measure the unintended consequences of your menu changes, you are likely to repeat the ones that can hurt you. To see the complete picture, you must go beyond the Product Mix report, and even the POS system.
