What is customer behavior analytics?
Customer behavior analytics is the process of collecting and analyzing data on how customers interact with a restaurant - what they order, how often, and their preferences - to help owners make informed decisions that improve menu offerings, service, and overall guest experience.
Menu Engineering with Customer Behavior Analytics
Importance of Menu Design
Your menu is more than just a list of food and drinks - it's what shapes your customers' experience and decides how much money your restaurant makes. But creating the perfect menu can be tricky. Many restaurant owners choose dishes based on what they like or what they've always offered. This can sometimes mean customers don't get what they really want, and some dishes end up sitting unused, costing time and money.
Did you know that nearly 70% of customers decide what to order based on how the menu looks and what's highlighted? That means your menu design and the choices you offer have a big impact on what people buy. Using customer behavior analytics means looking at real data - what dishes sell the most, which ones bring in the most money, and which don't get ordered at all. Instead of guessing, you can make smart changes based on what your customers actually want.
Customer Behavior Analytics and Menu Engineering
Customer behavior analytics might sound complicated, but it's simply about paying attention to what your guests do when they visit your restaurant. Instead of guessing what they like or hoping a dish will sell, you gather real information about their choices. This information helps you understand what dishes your customers order most often, which ones bring in more money, and how they put together their meals.
For example, your point-of-sale (POS) system records every order - so you can see which dishes fly off the menu and which ones barely get picked. You might notice that the burger sells a lot but has a lower profit margin, while a pasta dish is less popular but makes more money per sale. Customer behavior analytics also looks at how customers combine dishes, like what appetizers they order before the main course, or what desserts are popular after certain meals.
This data gives you a clear picture of what your customers really want. It's like having a conversation with your guests without needing to ask every single person. By tracking and analyzing these patterns over time, you can spot trends - maybe some dishes are popular only during certain seasons or at specific times of the day.
Understanding customer behavior means you can make better decisions about your menu. Instead of guessing or sticking with the same old dishes, you can focus on what works best. That helps improve customer satisfaction and makes your restaurant more profitable. In short, customer behavior analytics is about using facts from your own restaurant to guide smart menu choices.
Identifying Popular Dishes
One of the first things customer behavior analytics helps you do is find out which dishes your customers love the most. Popular dishes are the ones ordered frequently and repeatedly by guests. Instead of guessing which items sell well, you can look at real sales numbers from your POS or ordering system to see what's flying off the menu.
1. Analyze Sales Over Time - Look at your data over several weeks or months, not just one day, to get a clear picture of consistent favorites. For example, if your chicken sandwich sells 50 times a week and the salad only 10 times, that's a sign where customer preference lies.
2. Consider Timing and Seasonality - Sometimes, a dish is very popular during lunch but less so at dinner, or it might be a seasonal favorite that sells well only in warmer months. Understanding these details helps you plan your menu to meet customer needs better.
4. Highlight Popular Items - Once you identify favorites, place them in easy-to-see spots on your menu and add appealing descriptions to attract more attention.
Popularity alone isn't everything - you'll still want to check how profitable these dishes are, but knowing what your customers order most is the starting point. Let the data guide you rather than assumptions. When you trust what your customers actually order, you create a menu that feels tailored and satisfying, which keeps guests coming back.
Recognizing High-Profit, High-Impact Dishes
After you identify which dishes are popular, the next step is to find out which ones bring in the most profit. Some dishes might sell a lot but have low profit margins because they cost more to make. Others might be ordered less often but bring in more money per sale. Knowing this helps you focus on dishes that truly boost your bottom line.
1. Calculate Contribution Margin - This means subtracting the cost of ingredients and preparation from the dish's selling price. For example, if a pasta dish costs $5 to make and sells for $15, the contribution margin is $10. This number tells you how much money each dish adds to your profits.
2. Look for Balance Between Popularity and Profit - High-profit dishes are important, but they also need to be popular enough to sell regularly. A very profitable dish that no one orders won't help your restaurant much. So, focus on dishes that are both liked by customers and good for your profits.
3. Spot Opportunities to Upsell - Sometimes, a dish with a moderate profit margin can bring in more money if customers add extras, like drinks, sides, or toppings. Use data to find which dishes are often ordered with add-ons and promote these combinations on your menu.
4. Use Pricing Strategies - Based on the data, you can adjust prices slightly to improve profits without scaring customers away. For example, raising the price of a popular dish by a small amount might increase revenue significantly.
By focusing on high-impact dishes, you make your menu work smarter for you. You encourage customers to order items that bring in more money while keeping them happy with dishes they enjoy. This balance is key to running a successful restaurant.
Pinpointing Under-performing Menu Items
While it's important to highlight popular and profitable dishes, it's just as crucial to identify which menu items aren't doing well. Keeping under-performing or unprofitable dishes can drain resources, take up kitchen time, and confuse customers with too many options. Customer behavior analytics helps you spot these problem areas so you can make smarter decisions.
1. Identify Low-Selling Items - Start by looking at dishes that have very few orders over a long period. If something is rarely chosen, it might be because customers don't like it, don't understand it, or it doesn't fit with the rest of the menu.
2. Check Profit Margins - Some dishes might sell okay but cost too much to prepare, leaving little or no profit. High ingredient costs, long prep times, or waste can make certain items unprofitable even if they're somewhat popular.
3. Watch for Customer Feedback - Combine your sales data with feedback from guests or servers. Sometimes a dish is unpopular because of taste, portion size, or presentation issues. Analytics can show you the what, but feedback can explain the why.
4. Avoid Overloading Your Menu - A crowded menu can overwhelm customers and slow kitchen operations. Cutting out underperforming dishes streamlines choices and helps focus on your best offerings.
Once you identify these weaker items, decide whether to improve them - like adjusting the recipe or price - or remove them entirely. Remember, removing a dish doesn't mean losing customers; it means making your menu clearer and your kitchen more efficient. Regularly reviewing your menu using customer data ensures you're always offering the best mix of dishes that satisfy customers and keep your restaurant running smoothly.
Ordering Patterns and Preferences
Customer behavior analytics does more than just show which dishes sell well - it also reveals how customers put their meals together and what preferences they have. Understanding these patterns helps you create a menu that feels thoughtful and meets your guests' needs better.
1. Look at Common Combinations - For example, which appetizers do customers often order before certain main dishes? Do they prefer a specific side with a particular entree? Knowing these combinations lets you suggest meal pairings on your menu or train staff to recommend them, which can increase sales.
2. Consider Timing and Occasions - Customers may order differently depending on the time of day or the occasion. Lunch choices might be lighter or quicker than dinner, and weekend dining might include more indulgent options. Analyzing ordering times helps you tailor menus for breakfast, lunch, or dinner, offering the right dishes at the right time.
3. Segment Your Audience - Different groups of customers may have unique preferences. Families might favor kid-friendly meals, while solo diners might prefer quick, simple dishes. If you can segment your customers by behavior, you can design menu sections or specials that appeal to each group.
4. Adjust for Seasonality - Certain dishes might be popular only during specific seasons. Tracking these changes helps you keep your menu fresh and relevant year-round.
By understanding how your customers combine dishes and what influences their choices, you can design a menu that feels personalized and encourages guests to order more. These insights help your restaurant stand out by making the dining experience smoother and more enjoyable for everyone.
Revise Your Menu Based on Analytics
Once you've gathered insights from customer behavior analytics, it's time to put that data to use. Revising your menu doesn't have to be a complete overhaul - it's about making smart, focused changes that improve your customers' experience and your bottom line.
1. Highlight High-Performing Items - Use your menu layout to draw attention to your best-selling and most profitable dishes. These could be placed in the top corners, marked as chef's specials, or given a box around them to stand out.
2. Group Dishes Strategically - Organize your menu in a way that makes sense for how people order. If you know certain appetizers are often ordered with specific mains, place them close together to encourage pairing.
3. Rework or Remove Weak Items - Based on the data, remove low-performing dishes or rework them with better ingredients, pricing, or a fresh name. Trimming the menu can also reduce confusion for customers and speed up kitchen prep times.
4. Fine-Tune Descriptions and Prices - Make small pricing changes to improve margins on popular dishes. Also, update item descriptions to better reflect what guests love about each dish. Use clear, tasty language that appeals to the senses.
5. Test and Track Changes - After making adjustments, continue tracking how the updated menu performs. Are guests ordering differently? Are profits improving? Use that feedback to keep fine-tuning.
By taking a thoughtful, step-by-step approach, you can use data to shape a better, more profitable menu - without overwhelming your team or your guests.
Continuous Improvement
Menu engineering isn't a one-time task - it's an ongoing process. Customer tastes change, ingredient costs shift, and dining habits evolve. That's why it's important to regularly review your menu using updated customer behavior data. By keeping an eye on how dishes are performing month to month, you can stay ahead of trends and avoid falling into the trap of offering items that no longer serve your goals.
1. Set a Regular Review Schedule - Whether it's monthly or quarterly, plan a time to sit down with your team and look over sales data, customer feedback, and food costs.
2. Track What Works, and What Doesn't - Monitor the results of any menu changes you make. Are customers ordering the new dish more? Has the average check size increased? These signs tell you if your changes are helping or if further tweaks are needed.
3. Involve Your Staff - Your servers and kitchen staff interact with your guests daily. Include their feedback in the process - they often notice patterns that data alone may not show.
4. Stay Flexible - Don't be afraid to make adjustments. A successful menu is one that keeps evolving with your customers and your business.
Want to make smarter menu decisions backed by real customer data? Altametrics makes it easy to gather and analyze key insights, helping you identify bestsellers, cut underperformers, and boost profits.
Start using data the right way - explore Altametrics today by clicking "Schedule a Demo" below and take control of your menu.
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Frequently Asked Questions
What are some signs a dish should be removed from the menu?
Look for consistently low sales, high food waste, poor profit margins, or frequent customer complaints.
How can I track customer behavior across multiple locations?
Use centralized analytics platforms that consolidate data from all your locations. This helps you spot location-specific trends and make broader strategy decisions.
What kind of customer behavior data is most important for menu design?
Focus on order frequency, profit margins, item pairings, time-of-day trends, and modifiers (like extra cheese or side swaps).
How can I encourage customers to order high-profit items?
Use menu design tricks like placing these items in the top-right corner, highlighting them with icons or boxes, or giving them appealing descriptions.
