Sometimes simple ideas can have powerful consequences.

And here’s one you will want to test if you work with clients in the restaurant and hospitality industry.

Testing this idea with your clients can add huge value to their business.

A simple change to the price menu

In the competitive world of dining, the devil is often in the details.

One such detail that might seem trivial but can have a profound impact on your bottom line is menu design—specifically, how you present your prices. Stripping away currency symbols, for instance, might just relax your customers enough to boost your sales.

The Psychological Impact of Price Presentation

Removing currency symbols from menu prices isn't just a design choice; it’s a strategic business decision. Research by Sybil S. Yanga, Sheryl E. Kimesb, and Mauro M. Sessarego suggests that when restaurants eliminate currency symbols from their menus, customer spending can increase by as much as 8%.

This effect stems from the lessened emphasis on the cost, which can subconsciously encourage higher spending.

Exploring Different Price Formats

Menu prices can be displayed in various formats, each influencing consumer perception and behavior. While traditional formats with currency symbols ($20) remind customers of the cost, subtle alternatives (20 or twenty dollars) might focus their attention on the value or allure of the dish instead.

Despite these differences, the key is finding a format that aligns with your restaurant's ambiance and customer expectations.

The Experiment and Its Findings

A revealing experiment conducted at the Culinary Institute of America's St. Andrews Café tested the impact of different price formats on customer spending.

The results were telling: menus that omitted explicit monetary cues like “$” or “dollars” saw a statistically significant increase in spending per person.

This suggests that less prominent price signals can effectively enhance revenue without altering menu content or raising prices.

Implications and Future Directions

For restaurant owners, these insights offer a compelling case for experimenting with menu typography.

Consider implementing a test phase where you compare the traditional price presentation against a more discreet format. Monitor the changes in customer behaviour and overall sales to gauge effectiveness.

Further research could explore how these strategies translate to different types of dining establishments or even beyond the restaurant industry.

Understanding the broader implications of price presentation could unlock new ways to enhance customer experience and profitability.

Conclusion

When delivering business advisory solutions to clients, I have found that most small businesses know very little about pricing. And yet, price can have the fastest impact on profits.

As we’ve seen here, small changes in how you present prices can significantly affect a restaurant's revenue.

Encouraging their customers to spend more by subtly adjusting their menu’s price presentation is a strategy worth testing.

If you want to help your clients grow the profits of their business you can add significant value helping them to get their pricing right.

If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.

Wishing you every success on your pricing journey

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”