Nearly two years ago, millennials’ Instagram pages and many influencers’ YouTube pages were flooded with posts about an elaborate, brightly colored Starbucks drink. The drink, which was purple and green, was named the Mermaid Frappuccino, and its popularity ballooned after an image of it was posted on social media.
After seeing it online, hundreds of excited customers began to order the exclusive drink, which at the time, was on Starbucks’s infamous secret menu.
A secret menu is a list of food items that aren’t offered as options on a company’s main menu. At first it may seem that such a strategy is unwise. After all, with secret menus, a restaurant excludes customers from certain menu items, so how could they possibly maximize revenues?
However, quite the contrary is true. Hundreds of restaurant chains, such as Taco Bell, Chipotle, and McDonald’s, have found secret menus to be extremely beneficial to the bottom line, and this is why they are widely used. In fact, secret menus have recently become so popular that many restaurants consider them more of a staple addition rather than a secret.
Customers truly love them because secret menus give them a sense of importance. After ordering a product from a secret menu, almost all servers see smiling customers. This is because such menus make individuals feel as if they are “in-the-know” — they feel powerful ordering an exclusive product that many people don’t even know exists.
This feeling of exclusivity fulfills an individual’s need to belong. Simply put, people want to feel important and be admired by others. Buying products that are special satisfies this desire and in effect, boost’s one’s confidence, which is something that’s particularly important, as nearly 85 percent of individuals suffer from low self-esteem.
However, restauranteurs, in addition to customers, also love secret menus. With secret menus, foodservice establishments can test new food and drink offerings without incurring a high level of risk.
On average, it is recommended that a business spends between 5-10 percent of its yearly gross sales for marketing new products. If the product is successful, this amount represents a small investment that yields a high return, but nonetheless, this isn’t always the case.
Sometimes, customers strongly dislike a new product so much so that it’s ultimately removed from menus. This creates a sunk cost, which means the money spent on promoting the new food or drink cannot be recovered.
What’s worse is that at times, offering new products that are disliked by customers can also increase complaints and lead to negative guest experiences. This adversely effects a restaurant’s reputation and drives down customer retention rates, as well.
So, it’s evident that secret menus eliminate problems associated with traditional methods of introducing new products. With secret menus, restaurants can test out potential new items without incurring any marketing cost or letting the general mass of customers know about it. If the product isn’t well-liked, it is simply removed from the secret menu. No marketing fees were wasted, not every customer knew about it, and the restaurant can simply shrug off the unpopular item and look to their new product developments.