The Proof of Prix Fixe
By Larry Mogelonsky , Principal, Hotel Mogel Consulting Ltd. & Chairman, LMA Communications Inc.
Choice is a tricky thing. Confronted with too much of it and you are stymied by indecision. Yet faced by too little and you feel shortchanged or indifferent to the whole buying process. It's all about finding that happy medium, and to help you decipher this golden mean there's better place to start than by examining how prix fixe menus subtly work to build revenue and customer satisfaction.
The opposite of prix fixe would entail those restaurants where the menu is far too long, typically bordering on double digits in page length. In these situations, guests end up perusing the menu for a tad longer than if the menu were displayed on one to three pages – that is, increasing the time per seating – or they give up and go with something similar. Both cases inevitably lead to reduced meal satisfaction. In the former scenario, too much choice leads to indecisiveness which subconsciously causes people to be unhappy with their final selection as they always wonder with a hint of regret what could have been. And in the latter, the order that's familiar won't win your kitchen much praise because you aren't wowing people with a unique creation.
Ultimately, a prix fixe menu can help to streamline meal delivery (and thereby increase turns if deserved), reduce total ingredient number and boost revenue per turn in situations where customers wouldn't opt for a full meal (including appetizers and sweets at the end, also called a perfect check) and only order a main. While it's all but a given for banquet or big catered events that a fixed meal be used, many restaurants shy away from fully investing in this approach for their regular fare because it's felt that – to offer two reasons of many – it may limit the overall ingenuity of the kitchen or hurt meal satisfaction by restricting the total breadth of what's available.
When done right, though, you can move to a permanent prix fixe outline. The first step is to identify your most popular menu items for each category then design a prix fixe menu around them, offering a bit of choice for each course. Next, look to set up a daily or semi-daily rotation of prix fixe menus like how you would for the specials. This second step will inform you as to which combinations of dishes are working best as well as whether there are preferred days of the week for the prix fixe option. From there, and undoubtedly after a significant amount of feedback and fine tuning, you can aim to make this the centerpiece of your restaurant by offering multiple prix fixe menus at different price points with all substitutions or a la carte selections at an extra charge.
Adapting this broad methodology to other hotel operations reveals that there are sizeable parallels for more efficient service delivery, significant cost savings and increased sales, all based on the psychological principle of limited optionality or partial choice. It's this last aspect of heightened revenues that can be particularly handy when it comes to upselling on rooms or amenity packages.
For instance, if you are on the senior planning committee for a resort, what types of all inclusive, prix fixe packages might you offer to potential customers so that they can experience the best of what your property has to offer and get a good deal in the process? While you might want to silo off the golf from the activities, spa and dining components – and indeed you may be restricted in this regard by software systems that are incompatible with your PMS – it may be worthwhile investigating how you might set up a multi-operation promotion that includes accommodations and the guest's choice of amenities from a selection of onsite or partnered facility offerings.
Obviously, this mixing-and-matching would have to be properly balanced so that you recover your margins, but the bones of the idea is that you are incentivizing people so that you can capture more ancillary revenues upfront while also keeping them involved in the overall process by giving them a bit of choice. As an extension, you might consider offering a resort-wide voucher where credit can be applied towards any amenity with better deals for the more nights that are booked.
In my experience as a hotel marketer, I've helped build numerous packages of this nature, so let me finish by saying that these generalizations barely scratch the surface as to the amount of work required to properly get moving in this prix fixe direction, especially when you take into account on-property software conflicts, third-party supplier agreements or any region-specific challenges that your hotel may be currently facing. Nevertheless, as has been proven time and again, promotions with clear messaging and a somewhat flexible offer will work. If you want to discuss further, I'm only an email away!
(Article by Larry Mogelonsky, originally published in HotelsMag on June 14, 2017)