Your menu is more than a list of meals. It is your starting point for driving revenue. Get it right, and items drive profits up and costs down. Get it wrong and it’s the first place your profit margins and revenue will leak.

Effective menu engineering uses data insights to significantly boost profitability and enhance customer experience, addressing industry challenges like rising ingredient costs, labour shortages, and changing consumer preferences without necessarily changing your recipes or raising prices. The key is to use data and design to get more from what you already do well, with a mix of analysis & psychology.

What is Menu Engineering?

Menu engineering combines sales data, customer psychology, and strategic design to optimize your menu for profitability and customer satisfaction. By analyzing sales performance and food costs, you classify menu items strategically, enabling you to:

• Highlight high-profit items

• Optimise pricing and menu design

• Reduce waste and inventory costs

• Deliver a seamless dining experience

With Liven One's integrated platform—including Zeemart, Abacus POS, and OrderUp—you have built-in tools to simplify and amplify your menu engineering efforts.

Step-by-Step guide to effective Menu Engineering

1. Analyse customer preferences

Before you start designing your menu, it is a good idea to take a look at what locals are craving. Use tools like Google Keyword Planner to uncover local search trends - whether it’s bao buns, vegan laksa, or loaded croissants. 

Use this insight to tailor items on your menu, and align your offerings to match demand.

Pro Tip:  Highlight popular dishes or deals with a promo pop-up using Liven OrderUp

2. Classify menu items based on performance

Grab your data from POS and procurement to calculate food cost per item, selling price and per item sales figures. Using this information, classify items as per the following:

• Stars: High profitability and high popularity - promote and position prominently

• Plowhorses: Low profitability, high popularity - consider slight price adjustments or upsell

• Puzzles: High profitability, low popularity - consider bundling or promos to boost visibility

• Sloths: Low profitability, low popularity - consider removing or reworking.

Pro Tip: Use Zeemart’s Theoretical Cost of Good Sold report for easy item-level cost and sales tracking

3. Optimise menu layout, design and content

Customers typically read menus in a Z-pattern (top left to bottom right). Place your Star items strategically in these prime locations. If you’re using Orderup, for example, you can highlight them as featured images. Ensure you also section your menu, and don’t include more than 6-8 items per section.

When it comes to the descriptions, use appealing & descriptive language to emphasise sensory details (e.g. “slow-roasted pork belly with crisp house-made slaw” instead of “pork belly with coleslaw”). Mentioning sourcing or technique also helps justify premium pricing. Maintain consistent and clearly formatted pricing.

Pro Tip: Liven’s Abacus POS offers you “write once, update everywhere” capabilities that make it easy for you to easily replicate any changes you make across your dine-in, online, pick up or takeaway menus!

4. Test pricing strategies 

Experiment with different pricing models, for example:

• Dynamic Pricing: Adjust prices based on peak times (e.g., slightly higher prices during weekends or dinner service)

• Tiered Pricing: Offer different pricing tiers based on dine-in vs. takeaway or delivery

• Promotional Pricing: Introduce limited-time offers or discounts on specific dishes during off-peak hours

• Psychological Pricing: Use prices ending in .99 or .95 to encourage perceived value

Pro Tip: Liven’s Abacus POS gives you the ability to easily test out up to 15 level of pricing tiers, making experimentation easy

5. Bundle and upsell 

You can increase average order value through smart bundling or upselling. The classification you did in step 2 becomes an essential part of this bundling strategy. The key is to pair popular dishes (stars, plowhorses) with high-margin items (puzzles), so you can boost up order values and profit margins.

Pro Tip: Train your team to upsell your Stars and give Puzzles a little nudge. With Abacus POS, you can also set-up upsell prompts or and easily create bundled meal deals using tags or any other type of combos and promo offers for customers to action on themselves

6. Monitor and control food costs

Menu engineering is not just about what goes on in the menu. For it to really work you need to regularly track ingredient costs and manage inventory effectively. Here’s how:

• Track your ingredients (cost) price in real-time

• Sync inventory data across front and back of house

• Act promptly on margin changes

• Regularly compare supplier options to optimize 

Pro Tip: Zeemart tracks any updates in cost price in real-time and sends you alerts. It also allows you to easily compare supplier costs and set defaults based on price.

Common Mistakes to Avoid

Many venues run into the same menu problems: cluttered layouts, awkward pricing, too many choices. The good news is every one of these issues has easy fixes.

Measuring Your Success

So now that you know how to use data to engineer your menu, here are some metrics you can use to monitor & measure its impact:

• Customer spend per visit

• Repeat customer rates

• Waste reduction percentages

• Margin improvements

Keep improving your menu with Liven

To be effective, Menu engineering needs accurate food costs and real-time updates. That’s where Liven really takes the cake. 

Liven, through the deep POS and procurement integration, connects your supply chain to your menu and sales - tracking stock levels, ingredient prices, supplier performance and sales data in real-time right down to the modifier level. It also reduces waste by helping you reorder based on real usage, not guesswork. With Liven, you stay in control of profitability, cut back on over-ordering, and make sharper decisions based on live data, from supplier to service.

Ready to Upgrade? 

Menu engineering is a smart, simple way for any venue to improve profitability. Liven gives you everything you need to do this well and with ease. From POS and real-time analytics to digital menus and upsell tools, you can build a menu that works hard behind the scenes. If you are ready to take the next step, talk to us, we are ready to help.