I want to do more aggressive advertising and I am looking for clever ideas to name those coupons.
Recession Proof
Recession Buster
What else?
How about “joe shmo’s” economic stimulus package, or joe shmos’s economic bailout plan.
How about Recession suppression? I just came across this article that also may be of interest/benefit.
http://www.akronscore.org/texis/SCORE/p … htm&NNN=93
More advertising is a good idea… BUT there are other forms of advertising than coupons!!
Advertise convenience, service quality and tie it to value. Pizza is a great meal and comes in less expensive than other convenient options.
With hgh costs these days and limited pricing power you need to avoid going to the discount well as your 'Advertising" option.
When you advertise price you are telling people that Price is the reason to buy from you. If you can not think of a better reason to buy from you than price, you have some serious issues to address. Concentrate your marketing message on the reasons people should buy from you.
I don’t want to hijack this thread, but I can’t resist a comment on this statement.
IMO, this couldn’t be further from the truth. I mean, it sounds great and all that - “I have the best pizza”, “I use the best ingredients”, etc., etc. But the fact is that many (if not most) people couldn’t care less about that - as long as the pizza is decent and the service is decent. Most people care about price first.
We don’t have the best pizza. We don’t use the best ingredients we can find. We are not the cheapest - but close to it. 95% of our advertisements focus on price. I’d bet we are making 4 times more money than the places down the street that use the best ingredients and have better pizza. I’ve probably seen 20 of them close over the past 4 years, most of them don’t make it more than 18 months. Yet, they had great pizza - and it was expensive compared to us.
A lot of these places even used that great “Grande Cheese” - that should have put us out of business within weeks! :roll: Yet, they are the ones closing their doors left and right.
To the OP, don’t lose sight that you are probably in this business to make money. Not to spend your money trying to show the “uneducated masses” what great pizza is and why they should be paying you for the privledge of that education.
Guest, sounds like you must be a national franchisee. I don’t know who you are, but I can tell you there are few pizza shops doing any better than we do and have done for a decade. Our “owner’s discreationary cash flow” is at 24% on sales, and is well in to 6 figures. This is in a market where rent is $27 per foot, and pizza cooks make $11-$14 per hour.
Yes, there are different models out there that work. You are mistaken about your consumer behavior generalization. When you only promote price you attract the customers who only care about price. When you change strategy you can attract a different and more profitable customer. You can still motivate them with a deal but it should not be the lead story.
When you go to price as your model you had better have a significant point of leverage on costs. For the most part, indis do not have that leverage. If your competitors have better cost structures, there is no bottom to the price strategy.
Are there places that have gone with quality as the message that have failed. Yup, no doubt. Was quality why they failed? No way. In my market, the volume is not available. I can duke it out with dominos and one stupid competitor across town for the lowerst price or I can offer something different and tell people about it. Yes, I sitll have coupons but I do not lead with that story in my marketing.
Right now, to survive, you need the pricing power to cover costs or access to high volume. Your generalizations are not valid unless the access to volume is really outstanding.
None of this is to say that special offers are not an important part of the pizza business, clearly they are and we use them too. BUT, they should not be the most prominent message you project to the customer. By the way, I am with you and the Grande cheese. I can not begin to justify it. On a delivery pie, I think it is actually an inferior product and the cost difference would take away about 30% of our net for the year.
I didn’t mean to sound like I was saying you were not telling the truth about your own business. I’m sure you are. But, from what I understand about your business, you are in a dramatically different area than most “normal” city/residential based businesses - with a standard mix of middle class/lower income customers.
Maybe there are more profitable customers, but how many of them are there? Are there enough of those customers to offset so many more not as profitable customers? I don’t think so, not in “normal” areas. This is obvious from what I see happening to those places that sell better pizza at much higher prices. They might be making more profit per customer, but if they have 1/10 of the order compared to my place, that doesn’t really help pay the rent.
I agree, quality is not why they failed - I admit their pizza was better than mine! The COST of that quality is why they failed. They didn’t do enough business because most people were not willing to pay for that quality. And that is my point.
Here is what got me most in your original post - you said “If you can not think of a better reason to buy from you than price, you have some serious issues to address.” Exactly what issues should one address if in fact price is the majority of the reason someone buys from you? Why isn’t price just as valid a focus as quality?
Again, I think your area is dramatically different from most big city areas - and thus your model works like it does.
This is a great thread.
Daddio, I liked the article. Some great advice in it.
I think the best thing that you can do in business is “watch and learn”. Look around you and see who is successful and copy them. Only do it better. Each area is different, people are different!
I’ll start by saying that you gotta do what works for you. Get the customers in the door and get them spending money. More important, though, is having a reason for them to come back again. Secondly, I don’t live in whatever is a “normal” city.
I come down in the middle of the price versus quality debate. You cannot have cheap pizza AND good quality product. Tom Lehmann has given us a few inspirational tracts on that in the past. You gotta find where on the spectrum you are most effective. The pile of failed pizza businesses in your wake failed to find their balance, manage/control their cash flow and get their message effectively to the marketplace. It is pretty much the same wherever you go. Without seeing their business plans, capitalization and model . . . it is impossible to attribute their failure solely to your superior business prowess and concept.
I don’t believe price is a valid foundation of marketing because it has no substance as a branding tool. There is no identity in lowest price. That generates inherent vulnerability/instability in the marketplace when someone with deep marketing pockets and a better product waltzes in and culls your herd. Let alone a rampant cheese market again in the current economy feel. In my philosophy, issues one must first address before pricing are developing a recognizable identity in the marketplace, establish a service level that outpaces the pricing, and establishing anchors in the community of some sort.
With those in place, Registered Guest, YOU will be leaving money on the table with price as the leading message. With an effective brand and other foundations in place, you can and will command a higher dollar for the exact same product. I contend that the exact same product, business costs and service level WILL command a higher price and, therefore, profit with a message that transcends the pricing.
“All this service and community investment . . . and still the best priced (best value) in town”
" . . . if that’s not enough, then we’ll price it at 9.99" Lead with the message and close with the pricing. Basic fundamentals of marketing. It capitalizes on two types of memory recall . . . primacy and recency. Customers will most remember the 1st and last thing in a message.
Yeah, I guess I will print door hangers, on front something like saying;
Our Stimulus Package
“Government got a plan we do toâ€
Than on the other side name the coupons related to recession. I think it would be funny for customers.
Price is the one of the reason, why they should buy from me. It doesn’t matter how cheap I sell my product if I can not provide the service I can not make it.
People buy from Dominos or Papa Johns is it because they are cheap? I don’t think so, customers buy from them because they have decent pizza with exceptionally great service and ease. Papa Johns regular prices are same as mine.
I think these are the times we should come up with creative marketing & advertising to hold strong. Every company provides discounts, even Mercedes Benz have sales, coupons, promotion…etc.
A pizza shop that does coupons should not be mistaken as having serious issues.
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I agree, quality is not why they failed - I admit their pizza was better than mine! The COST of that quality is why they failed. They didn’t do enough business because most people were not willing to pay for that quality. And that is my point…
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I don’t think reason is they lost the business because people were not willing to pay for quality. Than why the owner didn’t slashed the prices. If the food cost was the issue, he could easily change the Grande to other cheeses.
The reason why they failed besides financial issues must be the service related. He couldn’t provide the service customers needed that is because he probably didn’t have a system.
“A pizza shop that does coupons should not be mistaken as having serious issues.”
I never said they did but I stand by what I did say which was: “If you can not think of a better reason to buy from you than price, you have some serious issues to address.”
We use coupons a fair amount and have them placed in a number of mediums… BUT, when we advertise, the message is NOT the “deal”; it is what makes us different… Most of our adverting does not mention price AT ALL.
As Nick stated above, pricing is not a foundation for branding and leaves you vulnerable to better financed competitors or those with a cost advantage.
In the “national” world, Little Ceasars is the example of the business that tried to hang the message on price… and failed.
Guest, you are right that my market has some differences, but on the other hand, the principals of branding are not different. We compete in a market of 11000 year-round residents with 20 pizza places of which 8 deliver. Good thing for us, most are sit-down places that do not emphasize delivery when they are slammed in the dining room.
While I agree with the majority of your comments concerning quality and price, I would like to point out that Little Ceasers is still alive and kicking. They are expanding into our region of the state, and appear to opening up as close as they can to a succesfull pizza shop. They parked one less than a quarter mile from me about a year ago. I don’t know how they are doing now, I am to busy to go look, but when they opened there were a few months that I had a ton of time to go watch customers line up at their window. A good percentage of my customer base slowly drifted back to my store. The ones that were open about it came back for either the quality and consistecy of the product or the personilzed service. I am still not at the levels I was before they opened, so some people were more impressed with price, I assume they are moving a lot more pizza than I am since they are in a higher rent location, but it is not a model I would personally want to replicate.
Rick G
Just stay in touch with your clients…We have 4 pizza places in our area and not one has ever send me a card, flyer or email to keep in touch…I get the odd flyer in the mail but nothing specific to me…Setup a Constant Contact account and send an email a few times a month…Phone your customers from time to time to say thanks…
I cannot speak directly to the price message failing, but I can speak more philosophically to the point of pricing and unique selling points. Pizza_Tony, I live my business life as much as possible with major concepts from Sun Tsu in his “Art of War”. Sure, it is BC China, but it is a bible for successful business operation for me.
Contested Ground - If you obtain it is advantageous. Yet, if another obtains this same ground, it would also be advantageous for them. This is contested ground. In contested ground, do not attack.
Problem with a piece of turf that is advantageous for everyone, is that there will always be conflict over control. Resources will be continually spent to obtain, defend, and maintain the contested ground. It takes a LOT of resources to be in the LOW PRICE contested ground. If you have the superior resources and flexibility to be there, then you can succeed. We are talking money, equipment, experience, volume capacity, marketing plan. You must always out think and out maneuver the opponent and avoid direct confrontation in “contested ground” as it will spend valuable resources needed for other goals. Even if you win and are “King of the Hill”, there is always some hot shot coming along to try to take that hill for his own.
Pick the sort of model you are best equipped, flexible and capitalized to occupy and defend and thrive in. Learn how to operate in the various types of Ground discussed in Chapter 11 of “Art of War”. Every business and every marketplace are NOT the same or in the same strategic position. EXAMPLE: In my town of 2500 people I would wither and die before I did enough volume to thrive in a $5 pizza model. I have to determine my terrain, and how best to succeed. I have not the resources or flexibility to try that game here . . . I am still not sure what type of ground I am on this year/month 
It changes.
I would do a $5 delivery charge before I did a $5 pizza. LOL.
The bottom line for me is that if you don’t have the cost structure of Little Ceasar’s you better not try to duke it out on price with them.
Of course price is always important, but it is also tied to what is being sold. If you are going to sell higher priced goods, you need to communicate why they are better and THAT is your #1 message even when you are offering a deal.
The other side of that coin is that if you have to be higher priced because of your cost structure, you better make sure your product is superior.
The temptation to go to price in advertising is a common mistake in small businesses and one that puts many of them under. This issue not unique to pizza at all.
In closing, I believe that I may have overstated the position in my first post. I do not mean to imply that price is unimportant or that there are not customers that buy that way. I also do not mean to advocate not using coupons… far from it; we use them, customers expect them in pizza the way they do not expect to pay sticker for a new car… BUT beware of allowing price to become the message. It is a message ANYONE can claim and for which there is no bottom.
It is a good excercise to answer the question: “Why should people buy from my place of business?” If the only thing you can come up with is price you should consider working on some other ideas. Price should never be first.
Daddio,
I did the “Recession Suppression $5 Friday” for my daily fax. I kicked A**.I normal run 5 lunch specials a day, today i ran 4 at $5 each. I tripled my lunch delivery. I think it just hit a nerve with my custmers. You just have to start thinking out of the box. I been using taradel for all my printing now and saving alot compared to the printer 2 towns over.With all the money I’m saving I increased the amount of times I send out postcards now. I also did a insert in the paper , i did one side and my freind with his bar did the order. I’m not backing down!I will not lose one dollar to this down turn.What works for me my not work for u but you cannot give up and blame the ecomony.What Thanks Daddio
Price is our selling point.
You want a great 13" large gourmet pizza then it’s going to cost you $20, $13.50 for a Margherita or $15.50 for a BBQ Chicken.
We are more than double (almost tripple) the price of Domino’s and PH (we trade higher than PH) and still do $11 - 12K per week.
We offer great service, delivery when we have drivers available ( :roll: ), a product with unsurpassed quality and a range that the majors couldn’t / wouldn’t do.
Funny thing is that we decided to launch our 8 new “International” flavour gourmet pizzas when the ecconomy started to show sings of despairs and cracks appeared in the dam wall and these have taken off at $20 a throw. My stated theme then, and still is, that if there is a recession we have chosen not to participate in it.
There is no way I am going to sacrifice the little profit we get to chase a lower sell price just to keep my volumes up. Price yourself into oblivion if this is the choice you wish to make, because there is no way single stores can match the buying power of the chains to get down to their costs and match their prices.
I have no desire to be the biggest seller of pizzas in the bankruptcy court.
Dave
I often wonder why they would want to go after that portion of the market. The guy that is going to buy the cheapest pizza in town will buy it at $7.00 if that is the lowest price to be found. I wouldn’t think you have to fight to get to the bottom. Why artificially deflate the price? They need to take a lesson from the oil companies.
The same with the big three, sometimes it looks like they are in a suicide pact with the deals they offer. I assume they know a whole lot more than I do since they have been at it a lot longer and have franchises all over the world. You have to respect that, but sometimes I sit in the office and wonder why they want to sell 4 or 5 dollar pizzas when that is not what they made their empire on.
Rick
I do $25-$30000 A WEEK & my deals were for a $5 pasta Salad, Small Sub, Small Stromboli & Small Wrap. No $5 PIZZAS HERE! My average ticket for the day was $20.00. Not everybody in the office ordered a $5 lunch, it just got some lazy custmers to order. I also have a menu item that sells for $65.99. I did a bbq for $19000.00 last week, thats the custmers I go after.What
With out tourist economy we have a real roller coster. Our slowest weeks are around 7K and our biggest are 50K. Average ticket varies as well from about $29 in the summer to $38 in the winter. I could deliver $5 salads and appeitzers, I guess, but it is hard for me to justify the drivers time for single side dish orders.
Perhaps if I had large office buildings around I would think differently about it.