how ihop's new menu design gets customers to spend more...“guests were making additional...

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http://www.businessweek.com/articles/2014-01-10/how-ihops-new-menu-design-gets-customers-to-spend-more

How IHOP's New Menu Design GetsCustomers to Spend MoreBy Venessa Wong January 10, 2014

IHOP has a new menu, and now customers are spending more. That’s not acoincidence: The new menu was carefully designed to encourage diners toorder more. It’s like a Jedi mind trick that gets customers to order a side ofbacon.

According to DineEquity (DIN) executives, the redesign, introduced in April andin place across the country by June, is responsible for the restaurant’s recentsales boost. “The new menu’s improved layout … prompted guests to trade upand also helped to increase the sale of additional items, such as appetizers,”said Julia Stewart, DineEquity’s chief executive, during an October earningscall.

With an “expert in menu creative development,” whom the company declined toname, IHOP developed a new layout based on customer feedback in tests. Weasked Natalia Franco, the chain’s senior vice president of marketing andculinary, to dissect the art of this particular upsell.

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“Guests were making additional purchases and self-selecting higher-priceditems that may not have been noticed before,” Stewart said during a conferencecall.

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“The challenge is real estate. We need space for pictures, because that drivesour appeal,” says Franco.

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IHOP gets a lot of visits from families and boomers, who get more attention inthe new menu. “There are items meant to retain that loyal consumer base,”Franco says.

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Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter@venessawwong.

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