Leave Off the Dollar Sign to Increase Restaurant SalesOne tiny change to your menu can have a big impact on how customers view your offerings — and how much they spend.
You’ve probably agonized over how to price your menu offerings. But research suggests you should pay just as much attention to how you display those prices.
One study by Cornell University found an 8.15 percent increase in average spending per person when the dollar sign was removed.
How can such a small change make such a big difference?
“Aspects around the menu design — such as descriptors, labels, order and images — are central to purchasing decisions,” said Patrick Egan, manager of research and insights at Technomic, a consulting and research firm for the foodservice industry. Egan holds a Ph.D. in social psychology. “They structure the decision-making context in subtle and not-so-subtle ways.”
Restaurant owners tend to focus on the more noticeable aspects of the menu design and often overlook price formatting, said Egan. “However, research suggests that small changes in price format can impact consumers’ initial decisions and subsequent satisfaction in significant ways.”
Why might leaving off the dollar sign increase spending?
“The logic here is that the removal of the dollar sign pushes consumer attention away from the financial implications of their choice, and thus increases their willingness to select more ‘indulgent’ items. In other words, the dollar sign focuses people’s attention on item cost, rather than other competing attributes like flavor, quality or nutrition.”
“When the dollar sign is missing, the association with finance is somewhat less likely to be activated, which leads consumers to be influenced by other features of the ordering context, like their cravings for more indulgent items. Indeed, the less specific the pricing information overall, the more likely consumers are to make decisions based on perceived item quality as opposed to value.”
Who should drop the $?
“For operations whose brand image and marketing materials revolve around quality (as opposed to price or value), dropping the dollar symbol is a more appropriate strategy.
“For value-oriented brands, it seems less likely that removing dollar signs would impact consumer behavior, as the consumer is likely to already be considering the financial aspects of their choice before entering the venue. This is one reason why you see prices without dollar signs most often within the fine dining segment: Consumers go to these locations looking for indulgent items, and are thus less focused on value to begin with,” Egan said.
Skip the decimals, too
In the context of a retail store, pricing products in numbers ending in .99 may make customers think they’re getting the best value for their money. But unless you run a value-oriented restaurant, using this strategy on your menu could backfire.
“When consumers are exposed to information that is highly detailed, their mind is more likely to seek out other detailed information in the immediate future. In a menu context, this means that more specific pricing information (e.g., ‘$3.01’) spurs one’s mind to focus on concrete details of this item, such as price appropriateness, ingredient listings, nutritional content or portion size.”
“In contrast, more general pricing information spurs one’s mind to focus on abstract features of the item, such as flavor profile, geographical sourcing or pairing with other menu items.”
“By pushing consumers into an abstract mindset — by removing dollar signs, decimals and
other presentational details — you can theoretically influence them to be less scrupulous when ordering,” he said. In other words, a minimalist approach to prices lets your menu offerings shine.