Engineering your menu into an effective marketing tool is something every restaurant should invest the time and money necessary into accomplishing. And while there are some pretty standard tricks of the trade as far as organizing items and prices on your menu, deciding on the prices of menu items themselves is a whole discipline unto itself.

Research has shown that organizing prices the right way can affect what customers order and what they consider to be a good deal, and often will encourage them to spend more in your restaurant.


When someone looks at a menu, they will inevitably compare prices. If you’ve instituted some basic menu engineering best practices, you have already helped the customer make an emotional rather than monetary attachment to the item they want to order by deemphasizing the price altogether – removing the dollar signs, placing it below the description rather than by itself out to the side, etc.

Even so, people are going to compare prices. That’s where the Theory comes in. More often than not, customers will choose a middle-of-the-road option. The trick is to define “middle-of-the-road” for your customer. That’s why a smart restaurateur will create one entrée that is ridiculously expensive – absolutely and shamelessly high end. You may never sell a single one, but it doesn’t matter. That unaffordable entrée will give your customers a compass by which they will judge the rest of the menu.

The research shows that customers will pay more on average if they have a higher priced item to compare against. Their perception of value changes the higher the number they are comparing against is.

This phenomenon was illustrated very well in a study that took a completely irrelevant number – the last two digits of the respondent’s social security number – and then asked participants to bid on different items for sale. Those with social security digits in the upper 20% bid 200% - 300% more for items than those with digits in the bottom 20%.

Why? Because people innately base their perceived value for a product on the next relative number, whether it’s the last two digits of your social security number or a $25 prime rib.

That means you can price your bread-and-butter, high margin, best selling dishes a little higher and still convince your customer they’re getting a great value. And you never know, someone just might order that high end entrée once in awhile, which won’t be bad for your bottom line at all.