Many restaurants recognize the importance of analyzing item-level interactions to truly understand how to drive profits. To date, product mix tools have been inadequate for revealing the loyalty and total margin implications of individual menu items. For the first time, APT Menu Analyzer exposes hidden value drivers that can improve bottom line profitability.
A fast, flexible tool for driving strategic decisions using check-level transaction data, Menu Analyzer quantifies the true value of each menu item, based not only on each item's individual profitability, but also customer loyalty to each item and attachments of other items (such as beverages, sides, and desserts). Coupled with APT's Test & Learn™ Management Suite, Menu Analyzer allows decision makers to understand the impact of any in-market change (marketing, pricing, etc.) on check size, check composition, attachments between items, and customer loyalty.
APT Value Creation
APT Menu Analyzer answers specific business questions, such as:
Which menu items drive loyalty? Which convert first-time patrons to loyal patrons?
Some items have strong followings, with patrons ordering them again and again. Similarly, certain items may be especially effective at creating satisfying experiences for first time patrons, converting a first time user into a repeat user. In both cases, these items should be appropriately promoted. More importantly, when working through menu rationalization, loyalty must be taken into account to avoid killing a hidden gem.
Which items need to be fixed or cut from the menu?
Those items that are tried once and rarely ordered again indicate problems that need to be fixed. Oftentimes, these items are hidden from view when looking at product mix alone, as the high-volume of first time orders masks the lack of loyalty. In some cases, these are items that are strongly associated with a brand or concept (e.g. spaghetti for Italian food). Items that exhibit this problem and are strongly associated with the brand must be fixed; other items can be cut or replaced.
Which items or categories offer the most value?
Beyond simply the item-level margins, which items build attractive total check-level margins? For instance, we may not make much money on each caesar salad, but if those salads attract the type of clientele that also order a glass of wine and appetizer, we may benefit by promoting those salads more heavily.
How should we structure value meals or bundled offerings?
Price-based promotions, such as “2 entrées for the price of 1” or “Buy 2 entrées and get a free dessert” are always a trade-off: forfeit revenue on some items in order to generate incremental transactions and sales. APT Menu Analyzer parses historical transaction patterns to calculate the implied cost of any promotion before it is run. This allows you to understand the financial risks of any potential value offer before implementing it, enabling you to create attractive offerings that shield the restaurant from unnecessary losses (due to forfeiture of margin and trade-down).
How can add-on sales be improved?
Give your servers the tools to effectively sell add-ons and create more enjoyable meals. Using APT Menu Analyzer, learn exactly which beverage, appetizer, or side complement each entrée. Moreover, discover differences in preferences across the country, by time of day, restaurant location, or customer segment. With this knowledge in hand, servers can suggest complements that are more likely to resonate with patrons.