Tips That Increase Value and Offset Price Hikes
Customers are more accepting of menu price hikes when they believe the total value proposition tips to their favor. Here are simple ways you can boost perceived value.
Here is a welcome spot of good news: Consumer satisfaction within the full-service and fast-food restaurant sectors is trending upward, at present exceeding pre-pandemic levels, according to the American Customer Satisfaction Index (ACSI). In sharing this most recent data, ACSI tempered it by adding a cautionary note. Inflationary pressures will likely continue, menu price increases a very possible outcome.1
In fact, for the 12 months ending October 2023, menu prices inched up an average of 5.4%, according to the Bureau of Labor Statistics. By preemptively emphasizing strong value propositions for guests, operators can take steps to lessen price sensitivity and pushback while keeping overall satisfaction strong, positive, and on the uptick. Here are tactics that can be put into play, each of them heightening an operation’s perceived value and buffering price increases on menus.2
- Promotions, happy hours, bundled meals, and specials create a halo of value that casts a glow over the entire food and drink menu. Even if customers do not take advantage of these deals and price breaks, their availability signals that customer-focused value is a core tenet of the business
- Sourcing attributes listed on the menu convey a sense of specialness that’s recognized by diners as a commitment to quality. Highlighting such things as local ingredients, housemade, sustainable, and names of producers communicates positive points of differentiation and signifies that something special is going on in the kitchen
- Customizable options appeal to consumers’ desire to have it their way and the sense that a restaurant offers this type of latitude is seen as a competitive perk. Offering food and beverage choices doesn’t have to be operationally complicated or require deep inventory. A brioche or pretzel bun, sandwiches built with fried or grilled chicken breast, and an inventory of several dipping sauces are easy swap outs that satisfy different tastes
- Social media is a powerful way to connect and form emotional bonds with consumers. The messaging not only intended to be informative but also effective in telegraphing the style, vibe, and persona that exist within the four-walls experience. Posts that are quick, concise, memorable, and clever can help strengthen brand quality and prestige
- For many time-pressed patrons, convenience is a driver in purchase decisions, transforming the availability of grab-and-go items and meal solutions into a big value-add for the brand. That they’re more than willing to pay a premium for meals that make their lives easier turns into a win on all sides
- With the suggestion of value built into them, loyalty programs can be powerful incentives, creating connectedness with customers, building loyalty, strengthening affinity, and boosting repeat business. Even something as simple as punch cards that offer a free item on the tenth visit can be effective lures
- Younger demographics, particularly Gens Y, Z, and Alpha, are drawn to businesses that openly communicate commitment to shared core values. Principles such as social responsibility, fair trade, living wages, and sustainability rate high, the sense that a foodservice operation supports them in words and actions deemed to be positive, affinity-building attributes
- Design aesthetics matter, not just of the physical space but that of all touchpoints such as signage, menus, kiosks, uniforms, and advertising. Consistency with the brand persona connotes quality
- Full price transparency on menus, especially for any service fees added to checks and daily specials, is appreciated for its full-disclosure honesty
Sources: 1. American Customer Satisfaction Index: Press Release Restaurant Study 2022-2023 (June 2023). 2. CNN: Restaurant Prices Are Way Up. You May Want to Head to the Supermarket (November 2023).
The information provided is based on a general industry overview and is not specific to your business operation. Each business is unique, and decisions related to your business should be made after consultation with appropriate experts.