Many food truck vendors have been taught the formula and percentage methods of pricing their menus. Today we’ll discuss taking your prices to the next level by using the perceived value of your food truck dishes.

The common basis of food truck prices is based on the cost of the ingredients required to prepare a menu item. For example, let’s say a food truck owner wants to put a new item on the menu. Based on the recipe, cost of ingredients and portion size, the raw food cost of making one order of the menu item is \$2.00.

A vendor with a food cost target of 30 percent may take the \$2.00 cost and, using the formula method, comes up with a sales price of around \$6.67.

While this method may help the owner achieve their food cost objective, you need to ask yourself, what are they ignoring? They are ignoring the fact that their customers may be very willing to pay more (the perceived value), possibly much more than \$6.67 for a specialty food truck dish.

#### Using The Perceived Value Pricing Method

Calculating the cost of producing a food truck menu item should be part of the pricing process. With that said, it isn’t the most important component. The way to determining the perceived value of an item in the eyes of your customers and how much they are willing to pay for it.

A food truck in a market where specialty dishes typically sell for \$8.95 or \$9.95 could be losing over a dollar or more every time they sell a dish with a higher perceived value than just \$6.67.

#### Keep an eye on the competition

At least once a year take a peek at your local competitors and analyze their price points. How does your food truck stack up? This should provide you with at least some guidelines of what level of prices your market will bear.

#### Always consider the customers

What are the demographics of your food truck customers? Are they a mix of varying income levels or are they predominantly college students, or business professionals? You should have a sense of the price sensitivity of the people who typically stand in line at your food truck.

#### Look at your existing prices

Compare the popularity of your menu items in each section of your menu in light of each item’s price. The objective is to get a sense of how price sensitive your customers are based on what they are or not buying.