Dynamic Pricing
Configure dynamic pricing rules, understand price elasticity, run promotions with A/B testing, and manage real-time pricing adjustments.
How It Works
Dynamic pricing adjusts menu prices based on demand:
┌─────────────────────────────────────────────────────────────────┐
│ DYNAMIC PRICING ENGINE │
├─────────────────────────────────────────────────────────────────┤
│ │
│ BASE PRICE DEMAND FACTOR FINAL PRICE │
│ ───────────────────────────────────────────────────────────── │
│ │
│ Burger $16 × 1.0 (normal) = $16.00 │
│ Burger $16 × 1.15 (peak) = $18.40 (+$2.40) │
│ Burger $16 × 0.90 (slow) = $14.40 (-$1.60) │
│ │
│ ACTIVE RULES │
│ ───────────────────────────────────────────────────────────── │
│ ✓ Happy Hour (3-6pm): Appetizers -25% │
│ ✓ Peak Dinner (6-8pm): Entrees +10% │
│ ✓ Late Night (9pm+): Apps -20%, Drinks +5% │
│ ✓ Weekend Brunch: Brunch items +15% │
│ │
│ [Configure Rules] [View Price History] │
│ │
└─────────────────────────────────────────────────────────────────┘
Pricing Strategies
| Strategy | Description | Best For |
|---|---|---|
| Daypart Pricing | Different prices by time | All restaurants |
| Demand Surge | Raise prices when busy | High-demand venues |
| Happy Hour | Discount slow periods | Bars, casual dining |
| Event Pricing | Adjust for events | Sports bars, downtown |
| Seasonal | Summer/winter menus | Seasonal ingredients |
Setting Up Dynamic Pricing
- Go to Manager > Menu > Dynamic Pricing
- Enable dynamic pricing
- Configure rules:
┌─────────────────────────────────────────────────────────────────┐
│ CREATE PRICING RULE │
├─────────────────────────────────────────────────────────────────┤
│ │
│ Rule Name: [Peak Dinner Premium ] │
│ │
│ WHEN (Conditions) │
│ ───────────────────────────────────────────────────────────── │
│ Time: [6:00 PM] to [8:30 PM] │
│ Days: [✓] Fri [✓] Sat [✓] Sun [ ] Mon-Thu │
│ Demand: [When 80%+ capacity predicted] │
│ │
│ APPLY TO │
│ ───────────────────────────────────────────────────────────── │
│ Categories: [✓] Entrees [✓] Steaks [ ] Appetizers │
│ Items: [All in selected categories] │
│ │
│ ADJUSTMENT │
│ ───────────────────────────────────────────────────────────── │
│ Type: ○ Percentage ● Dollar Amount │
│ Change: [+$3.00] per item │
│ │
│ LIMITS │
│ ───────────────────────────────────────────────────────────── │
│ Max increase: [15%] above base price │
│ Approval: [ ] Require manager approval before applying │
│ │
│ [Cancel] [Save Rule] │
│ │
└─────────────────────────────────────────────────────────────────┘
Price Floors & Ceilings
Protect against extreme changes:
| Guard | Description |
|---|---|
| Price Floor | Minimum price (protect margin) |
| Price Ceiling | Maximum price (protect reputation) |
| Max Daily Change | Limit total change per day |
| Category Limits | Different limits per category |
Price Change Guidelines
| Category | Max Increase | Max Decrease | Frequency |
|---|---|---|---|
| Signature Items | 5% | 10% | Weekly |
| Commodities | 15% | 25% | Daily |
| Beverages | 10% | 30% | Hourly OK |
| Specials | 20% | 50% | Per event |
Customer Communication
- Do show "Happy Hour" and "Special" pricing
- Don't show "Surge" or "Peak Premium"
- Consider loyalty member pricing protection
- Always honor advertised prices
Price Elasticity
Understanding Elasticity
The system tracks how price changes affect demand:
┌─────────────────────────────────────────────────────────────────┐
│ PRICE ELASTICITY ANALYSIS │
├─────────────────────────────────────────────────────────────────┤
│ │
│ ITEM: Classic Burger │
│ │
│ ELASTICITY: -0.8 (Inelastic - good for pricing) │
│ Interpretation: 10% price increase → 8% demand decrease │
│ Revenue Impact: +1.2% net revenue gain │
│ │
│ PRICE SENSITIVITY CURVE │
│ ───────────────────────────────────────────────────────────── │
│ │
│ Demand│ │
│ 100%│████ │
│ 90%│████████ │
│ 80%│████████████ │
│ 70%│████████████████ │
│ 60%│████████████████████ │
│ └──────────────────────────────── │
│ $14 $16 $18 $20 $22 Price │
│ ↑ │
│ Current ($16) │
│ │
│ RECOMMENDATION: Can support $17 price point (+6% revenue) │
│ │
└─────────────────────────────────────────────────────────────────┘
Elasticity Categories
| Elasticity | Value | Meaning | Pricing Strategy |
|---|---|---|---|
| Inelastic | 0 to -0.5 | Demand barely changes | Safe to increase |
| Unit Elastic | -0.5 to -1.0 | Demand matches price | Test carefully |
| Elastic | -1.0 to -2.0 | Demand very sensitive | Avoid increases |
| Highly Elastic | Below -2.0 | Price kills demand | Consider decreases |
Promotion Engine
Creating Promotions
Test promotional pricing:
- Go to Manager > Marketing > Promotions
- Click New Promotion
- Configure:
┌─────────────────────────────────────────────────────────────────┐
│ CREATE PROMOTION │
├─────────────────────────────────────────────────────────────────┤
│ │
│ Promotion Name: [Taco Tuesday ] │
│ │
│ SCHEDULE │
│ ───────────────────────────────────────────────────────────── │
│ Days: [✓] Tuesday only │
│ Time: [All day] or [4:00 PM] to [Close] │
│ Duration: [Ongoing] or [Jan 1 - Mar 31] │
│ │
│ OFFER │
│ ───────────────────────────────────────────────────────────── │
│ Type: ○ % Off ● $ Off ○ BOGO ○ Bundle │
│ Amount: [$2.00 off each taco ] │
│ Items: [All items in "Tacos" category ] │
│ Limit: [No limit] per customer │
│ │
│ A/B TEST (optional) │
│ ───────────────────────────────────────────────────────────── │
│ [✓] Run A/B test │
│ Control: 50% of customers see regular price │
│ Test: 50% see promotional price │
│ Duration: 4 weeks minimum for significance │
│ │
│ [Cancel] [Launch Promotion] │
│ │
└─────────────────────────────────────────────────────────────────┘
Measuring Promotion ROI
┌─────────────────────────────────────────────────────────────────┐
│ PROMOTION RESULTS: TACO TUESDAY │
├─────────────────────────────────────────────────────────────────┤
│ │
│ PERIOD: Jan 7 - Feb 4 (4 Tuesdays) │
│ │
│ METRICS │
│ ───────────────────────────────────────────────────────────── │
│ Taco Sales: +145% vs prior Tuesdays │
│ Total Revenue: +28% vs prior Tuesdays │
│ Guest Count: +35% │
│ Avg Check: -5% ($32 → $30.40) │
│ │
│ FINANCIALS │
│ ───────────────────────────────────────────────────────────── │
│ Discount Given: $1,240 │
│ Incremental Rev: $3,850 │
│ Net Revenue Lift: $2,610 (+22%) │
│ ROI: 210% │
│ │
│ CANNIBALIZATION │
│ ───────────────────────────────────────────────────────────── │
│ Warning: Burger sales down -18% on Tuesdays │
│ Warning: Some regular taco buyers getting discount (est. 30%) │
│ │
│ RECOMMENDATION: Continue - Strong ROI despite cannibalization │
│ │
└─────────────────────────────────────────────────────────────────┘
A/B Testing
For new promotions:
- Enable A/B test in promotion setup
- System randomly assigns customers
- After sufficient data (typically 4 weeks)
- Statistical analysis shows winner
- Roll out winning variant
Real-Time Adjustments
Live Pricing Dashboard
Monitor and adjust prices in real-time:
┌─────────────────────────────────────────────────────────────────┐
│ LIVE PRICING CONTROL SAT 6:45 PM │
├─────────────────────────────────────────────────────────────────┤
│ │
│ CURRENT STATUS │
│ ───────────────────────────────────────────────────────────── │
│ Capacity: 92% (above 80% threshold) │
│ Wait Time: 25 min │
│ Active Rule: "Peak Dinner Premium" (+$3 entrees) │
│ │
│ ACTIVE ADJUSTMENTS │
│ ───────────────────────────────────────────────────────────── │
│ ✓ Entrees +$3.00 (Peak Dinner rule) │
│ ✓ Appetizers normal (not in peak rule) │
│ ✓ Drinks +$1.00 (Weekend bar rule) │
│ │
│ QUICK ACTIONS │
│ ───────────────────────────────────────────────────────────── │
│ [Pause All Rules] [Override: Return to Base] [Surge +10%] │
│ │
│ ALERTS │
│ ───────────────────────────────────────────────────────────── │
│ Dynamic pricing performing as expected │
│ Consider adding Late Night discount at 9pm │
│ │
└─────────────────────────────────────────────────────────────────┘
Manual Overrides
Override pricing rules when needed:
- Pause Rules: Stop all dynamic pricing temporarily
- Return to Base: Reset all items to base price
- Manual Surge: Apply flat percentage increase
- Item Override: Set specific item price
Rollback
If pricing causes issues:
- Go to Live Pricing > Rollback
- Select rollback point (last hour, today's open, etc.)
- Confirm rollback
- All prices revert instantly
Related Guides
- Setup - Configure forecasting and data sources
- Interpreting Forecasts - Reading and acting on predictions
- Menu Pricing - Base price configuration
- Marketing & CRM - Customer targeting