With 60% of independent coffee shops closing down within their first five years of business, the bottom line for these new start-ups must become, well, the bottom line. The subtleties of menu design, and the psychology behind them, are an implement which is underutilised by coffee shops to optimise customer spending on items with the largest profit margins.
A recent study carried out by Gallup indicates that the average customer spends a little over 100 seconds scanning a menu before making a selection. This makes readability paramount, with appropriate spacing being a key element to ensure customers view several items before their attention dwindles. It’s recommended that the gap between items is two thirds of the text height, as this offers maximum readability. Space allowed underneath items to list a flavour profile or ingredients has been discovered to increase sales by up to 20% – a strategy adopted by large chains. This added description could sway some customers, as well as providing opportunity to give beverages charismatic names, making a menu more distinctive and suggesting that products are bespoke to your establishment.
The Paradox of Choice
Variety may well be the spice of life, but overcrowded menus with cluttered options can be a serious hindrance when it comes to profit. This is highlighted by the psychology theory ‘The Paradox of Choice’. The theory indicates that an overwhelming number of choices creates anxiety and reduces consumer tendency to spend. Menu engineer Gregg Rapp agrees: “When menus include over seven items in a single category, a guest will become overwhelmed or confused, and they will typically default to an item they’ve had before.” And that’s at the expense of a more expensive or profitable purchase.
Offering a number of alternative products, such as vegan-friendly or gluten-free, is crucial for those customers who have specific dietary requirements. However, for those who are subject to a less decisive selection process, it’s pivotal to incentivise customers to purchase products with the highest mark up, or those which are highly perishable. Common psychological methods of drawing on this include displaying high value items in the upper right-hand corner of the menu – this is considered to be the ‘sweet spot’, where customers’ eyes are automatically drawn. To further reinforce this focal point, boldened typography is commonly incorporated to give these items further emphasis.
Colour can also be used to influence purchasing decisions, drawing the eye to items in particular categories. Colour has the ability to cause an emotional impact, with each colour holding different connotations. Three main colours are used for this: dark oranges indicate warm comfort – red being perceived as overly threatening –, pale blues to connote calm, refreshed feelings and greens to signify health orientated options. In drawing customers to an appealing beverage earlier, there is a longer period in which they can be incentivised to purchase other items prior to paying.
Psychological studies deduce that the omission of monetary symbols increases customer likelihood of purchasing higher valued items. It’s thought that the shortened length of the price on the page makes the cost appear less significant, albeit subconsciously. The distance to which the price is positioned in relation to a menu item also has a significant impact on its sales. Items with the price positioned further away allow the customer to make an emotional attachment to an item before viewing the cost, which could have led to it being immediately dismissed. Price rounding is another strategy which proves effective when appealing to middle to lower income demographics, with 5p being the optimal price drop, giving the illusion of a significantly lower cost when moving to a lower pound figure – for example, from £2.00 to £1.95.
Offering quality products is crucial to a coffee shop’s success, but this is only half the battle. Incorporating a scrupulously thought-out menu is a compelling element to getting the most profitable orders and securing your business’ financial future.