Latest / The Pricing Marketing Podcast with Fexingo: Price Anchoring, Bundling, and Conversion Pricing / How Restaurant Menu Design Tricks You Into Spending More
Transcript
- Lucas: You walk into a mid-range steakhouse in Manhattan. The waiter hands you a leather-bound menu. Your eye goes to the top of the steak column — fifty-eight dollars for a dry-aged ribeye. You flinch. Then you scan down and see a forty-two-dollar New York strip. And you think — okay, that's reasonable by comparison. Luna: And the thirty-two-dollar sirloin at the bottom suddenly feels like a bargain, even though it's still thirty-two dollars for a piece of beef. Lucas: Exactly. That menu is doing something very deliberate. It's using a price anchor — the fifty-eight-dollar item — to make everything else look cheaper. And this isn't new. But what's interesting is how restaurant menus have refined the technique over the past decade into something almost surgical. Lucas: Before we go deep on this — and I promise this connects — a quick note. If these marketing conversations have sparked something you've actually used, whether in your own business or just to understand why you bought that forty-two-dollar steak, a couple of dollars a month is genuinely what keeps these episodes ad-free. Buy me a coffee dot com slash fexingo — it's that simple. And it makes a real difference for a small show like this. Luna: Yeah, it really does. We don't run ads, so listener support is how this stays independent. Anyway — you were saying about the menu? Lucas: Right. So the classic anchor — the pricey item at the top — is just the starting point. The real sophistication is in what comes next. Many high-end restaurants now use what's called a 'bracket' technique. They'll list a very expensive item, then a slightly less expensive one, then a mid-range one that looks like the smart choice. Luna: So the middle item is essentially the decoy effect in reverse — it's the one they actually want you to buy, but it needs the expensive one above it to look reasonable. Lucas: Exactly. The term in the industry is 'menu engineering.' There's a whole field of consultants who do nothing else. They analyze eye-tracking studies, heat maps, even the exact font size and spacing. One study from Cornell's School of Hotel Administration found that when a restaurant removed dollar signs from its menu — just listing the number without the symbol — average check size increased by about eight percent. Luna: Because the dollar sign literally reminds you you're spending money. Without it, the number feels more abstract. Lucas: Right. And that's just one variable. There's also the 'box' technique — putting a high-margin item inside a box or border on the menu. That draws the eye. A New York steakhouse chain I looked at placed its fifty-eight-dollar dry-aged ribeye in a thin gold box. That item sold at three times the rate of the same cut listed without the box on the previous menu. Luna: So the box is like a visual spotlight. It tells your brain 'this is important' without you consciously knowing. Lucas: Yes. And they'll position that box at the top right of the page — which is where eye-tracking studies show diners look first. Not the center, not the top left. Top right. So the anchor is literally the first thing you see. Luna: Interesting. So if you're designing a pricing page for a software product — say, three tiers — you might put the most expensive tier first, top right, and let it anchor the rest. Lucas: Exactly the same principle. In fact, many SaaS companies have started doing exactly that. But the menu industry has another trick: the 'golden mean.' That's the dish priced not at the bottom, but right in the middle of the price range. It's the one that feels like the safe, quality choice. Luna: And that's typically the item with the highest profit margin for the restaurant, right? Lucas: Often, yes. Because it's not the cheapest — that's the loss leader or low-margin item. And it's not the most expensive — that's the anchor. The middle one is where they make their money. And they'll design the description to make it sound like the chef's specialty or the most popular choice. Luna: I remember reading about a study where a restaurant added a very expensive bottle of wine to the list — like two hundred dollars — and sales of the hundred-dollar bottles doubled. Because suddenly a hundred dollars felt reasonable. Lucas: Classic anchor effect. And they didn't expect to sell the two-hundred-dollar bottle. They put it there specifically to shift the reference point. That's the same logic as the fifty-eight-dollar steak making the forty-two-dollar one look like a deal. Lucas: But there's a twist. Some restaurants have started using a 'reverse anchor' — putting a very cheap item first, like a ten-dollar burger, to make everything else look premium. But that usually backfires because it lowers the perceived quality of the whole menu. Luna: So the anchor has to be credible. If you're a steakhouse, a ten-dollar burger doesn't belong. It breaks the frame. Lucas: Exactly. The anchor has to fit the category. A fifty-eight-dollar steak makes sense. A two-hundred-dollar bottle of wine makes sense. But a ten-dollar burger on a steakhouse menu undermines the whole experience. Luna: What about the way items are grouped? Some menus have columns — appetizers, steaks, sides — and the pricing within each column follows the same anchor pattern. Lucas: Yes. And that's where it gets really granular. A good menu engineer will design each column as its own mini pricing architecture. The appetizer column might have a fifteen-dollar item at the top, then a twelve-dollar one, then a nine-dollar one. That nine-dollar appetizer suddenly feels like a steal — even though it's still nine dollars for a small plate. Luna: And you might end up ordering two appetizers instead of one, because each one feels like a good deal in its own column. Lucas: Right. And that's how the check average climbs. It's not one big decision — it's a series of small decisions, each nudged by the anchor in that column. Lucas: There's also the 'bundle' technique — like a prix fixe menu. The restaurant offers a three-course meal for, say, sixty-five dollars. But if you ordered those three items separately, they'd total eighty dollars. So the bundle feels like a saving. But the restaurant has designed the bundle so that the items included are high-margin, so they still make more profit than if you'd ordered à la carte. Luna: So the anchor here is the eighty-dollar hypothetical total. You're comparing the bundle price to that, not to the cost of the ingredients. Lucas: Exactly. And they'll list the individual prices next to each item on the menu — small print — so you can do the math yourself. Or they'll put the bundle price in a larger font to emphasize the discount. Luna: I've also seen menus where they list prices with the cent symbol — like $42.00 — versus just $42. Does that make a difference? Lucas: There's some evidence that the decimal point and zeros signal precision, which can make the price feel more calculated and less emotional. But the bigger effect is the dollar sign removal, as I mentioned. Some restaurants even use the word 'dollars' spelled out — like 'forty-two dollars' — to make it feel more conversational. Luna: And the font itself — cursive versus block, serif versus sans-serif — does that affect perception? Lucas: It does. A study from the Journal of Consumer Research found that a difficult to read font — like a fancy script — made people perceive the dish as more upscale and worth a higher price. But only if the font was still legible. If it was too hard to read, people got frustrated and ordered less. Luna: So there's a sweet spot. Elegant but not illegible. Lucas: Right. And that's the art of menu engineering — all these small signals add up. The anchor, the box, the font, the placement, the absence of dollar signs. Each one shifts the reference point a little. Lucas: One more thing that's become popular recently: the 'no prices on the menu' trend — especially in high-end omakase or tasting menu spots. Some restaurants just list the dishes without prices. The idea is that you trust the chef and you're not thinking about cost. But of course, the anchor is set before you walk in — by the reputation, the reservation system, the known price range. Luna: So the anchor is external — it's the brand itself. The menu just reinforces the experience. Lucas: Exactly. And for the rest of us — whether you're a diner or a business owner — understanding these techniques is powerful. If you're a diner, you can spot the anchor and decide consciously whether to let it influence you. If you're a business owner, you can apply the same principles to your pricing page, your product list, your subscription tiers. Luna: So next time I see a fifty-eight-dollar steak at the top of a column, I'll know exactly what's happening. Lucas: And you can still order it — just know that the menu is doing exactly what it was designed to do.