Menu Engineering Part 2 of 2
In Part 1 of this series, I discussed considering the menu as a sales tool, and staying on top of price adjustments every year. In this article, I’ll delve a little deeper into menu logistics.
First, it is helpful to enter the entire contents of your existing menu into an excel spreadsheet, which makes it easy to view and manipulate your data. Plus, you can use the spreadsheet to create treatment rate or commission tables for your compensation plan at another time. Group services together by department; looking at your menu in this more abstract way makes it easier to determine retail prices for services. Once you’ve created the spreadsheet, re-order the services, and make sure to start with the highest-priced item, and let the others fall into place in order of price, ending with the least expensive. Spa menus always seem to start with the lowest priced service in a category, and most clients don’t read any further. Show me a sales report in which 80% of the facials performed are the entry-level facial, and I don’t need to see the menu to know it is presented in this way. Starting with the higher priced items will likely encourage clients to read more about their options; they may settle on a service priced somewhere in the middle, but not as low as the entry-level price.
Next, and perhaps most importantly, consider your technician compensation plan. If your plan emphasizes performance metrics such as average ticket, does your menu provide the structure to make upselling of services easy? I recently encountered a service menu with no facials priced between USD$85 and $135 – that’s too big a jump for 90% of your clients, who will all stick with the less expensive option. If your price structure on facials is $85, $93, $98, $103, and $112, and you add in a menu of micro treatments priced from $8 to $22, you’ll be able to find the sweet spot for any customer and give multiple upselling options to your staff. When the service providers have a menu that supports upselling, they are more likely to practice with every client, and they will be transformed from order-takers to sales creators.
For more excellent reading on the psychology of our human clients and choices, try the first chapter, “The Truth About Relativity,” of Behavioral Economist Dan Ariely’s excellent and fascinating book,
