Why It Works: A trip to Flat Iron reveals how it sells so much steak

A few months back, we headed to Costa Coffee to scan for behavioural tricks at the popular coffee chain. This time, we’re stepping it up, it’s dinner time, and steak is on the menu.

Let’s go and see how Flat Iron managed to clock up an impressive 10,000 steak sales a week by 2017. That was with 4 restaurants — they now have 18 — and more on the way. That’s a lot of cow.

A salty nudge

No sooner are we seated than a cheerful waiter brings over a cup of free popcorn along with our menus. We’ll chomp through this as we choose, with a general sense of warmth towards the place.

And right away, Flat Iron is tapping into a bias called reciprocity. Essentially, we feel more disposed to be generous to anyone who is generous with us. We feel obligated to repay the favour: it’s a foundation of human behaviour. In fact, the term “much obliged” — now an old-fashioned way to thank someone — literally means that we are indebted for whatever we have been given.

So, we’re being primed to tip generously.

Evidence for reciprocity comes from a study by David Strohmetz at Monmouth University. In 2002, he led an experiment into its effect on tips.

The researcher conducted the experiment in a New York restaurant, where some diners were given a mint at the end of their meal — this increased tipping by around 3% compared to those who received no mint.

It seems that a little bit of generosity goes a long way though, because when two mints were given, tips didn’t just double, they more than quadrupled. Diners tipped 14% higher than with no mint.

But perhaps most interesting of all, when the waiter proffered one mint, started to walk away, but then paused and said, “For you nice people, here’s an extra mint,” tips dramatically increased. This group tipped 23% more than no-mint diners. Flattery, they say, will get you anywhere.

This final variant of the experiment suggests that it’s not just the size of the gift that matters. It’s the sense that this is something slightly out of the ordinary. In the case of a waiter this could be making the diners feel like they have been specially selected. But for a brand, perhaps it’s about doing something a little unexpected, like proffering free popcorn.

Either way the free snack at the beginning of the meal sets us up nicely to order, and tip, generously.

Simply steak

Now, as we graze on our salty snack, let’s turn to the menu.

One of the first things that strikes us is how very brief it is. Food down the middle, drinks on the sides, and just one page. It takes just a moment to decide that, yes, we’ll have the flat iron steak please.

That’s what we’re here for, after all, and there isn’t a great deal else to choose from, though we could have had a cheeseburger, or upgraded to ribeye or wagyu.

By focusing on steak, and specifically one cut, Flat Iron becomes a specialist, and diners are likely to believe that this translates into high quality — it’s another key bias at work. The goal dilution effect.

One study demonstrating this effect comes from the University of Chicago’s Ying Zhang and Ayelet Fishbach. They asked participants to read some information about how eating tomatoes can support either one goal (“prevent cancer”), or two (“prevent cancer and degenerative disease of the eye”).

Participants were asked how effective tomatoes were at preventing cancer, the first goal. They rated it as 13% better for preventing cancer when this was given as the solo benefit, compared to being listed along with the second goal of eye health as well.

The researchers found similar results when they tested the benefits of aerobic exercise and the effects of quitting caffeine.

These findings suggest that Flat Iron is onto something by honing in on a single, signature dish — and doing it brilliantly. It makes us far more inclined to trust that what we order will be top-notch.

So, next time a colleague suggests adding just one more proof point into your ad, stop them right there and remind them of the goal dilution effect.

No signs

The other thing we notice about the menu is that the prices are given without pound signs — and the prices do seem very reasonable.

Leaving out currency symbols draws attention away from the ‘pain of payment’. There’s plenty of evidence that this tactic works as a way to reduce price sensitivity.

The most famous studies have shown higher price sensitivity when paying with cash vs electronic means — it clearly feels more real to part with actual cash than a theoretical change in numbers on a screen somewhere.

Other experiments specifically show that willingness to pay increases when pound signs are removed.

One such study was conducted in 2009 by Sybil Yang and Sheryl Kimes at Cornell University. In their real-world set-up, 201 tables at St Andrews Café in New York had one of three menus, which varied according to how prices were shown. This was either:

• a numeral (e.g. 20)
• a script (twenty dollars)
• a dollar sign (e.g. $20.99)

The researchers found that using a number without dollars resulted in an 8% increase (+$1.87 per person) in average spending compared to the other formats (significant at 90% CI).

In the authors’ words: “Changing the menu typography is like picking the low-hanging fruit when it comes to squeezing every last cent from an existing business: the yield may not be large, but it is easy to do”.

And this in part explains why the prices feel so reasonable.

A Flat Iron for an ice cream

We’ve finished our steaks and strangely, there aren’t any options listed for dessert or coffee. I guess we’re done here.

The waiter brings the bill (we’ll tip generously). And along with the reasonably priced total, he offers us a couple of miniature meat cleavers, and a thank you card.

He tells us we can swap them for an ice cream on the way out. It’s delightfully cute.

And our delight at this is a deliberate tactic too — it’s the peak-end rule in action. This defines the observation that we’re far more likely to remember the most intense, and the final, parts of any experience.

Various studies have shown this. One comes from Amy Do at Dartmouth College in 2008. She organised a charity raffle in which winners would receive movies on DVD. After the draw, she emailed 100 entrants to tell them they’d won and asked them to pick the title they wanted from a list.

Some winners were shown List A, a collection of highly-regarded films, as judged by the review site Rotten Tomatoes. Others were sent List B first, which was made up of films that were just so-so.

Some time later, the researchers contacted the winners again and offered a second movie, but this time from the list that they hadn’t already seen. Finally, participants were asked how happy they’d been with both their films.

The results, in the table below, show that people were most influenced by the latter of the two films they’d won. Even though all participants had been offered the exact same choice of films, the order in which the titles were offered impacted experience.

Order of lists seen	Happiness with films (1-7)
A then B (i.e. best film first)	4.14
B then A (i.e. best film last)	4.82

Results from Do (2008)

This is just one of many studies that show that our final moments of an experience are the ones that make lasting memories. And so, for Flat Iron, handing out a cute cleaver and free ice cream at the end of the meal is something that will stay with diners long after they’ve digested their steak.

We’ve seen some neat little tricks that tap into consumer psychology. These will undoubtedly have helped Flat Iron sell more steak by giving customers a quirky and memorable experience, at prices that feel reasonable, whilst generating good will toward the brand.

So, what can you give your customers? How can you surprise and delight them? They’ll likely repay the favour in loyalty or recommendations — or even in tips.