Need Some Advice

Pizza Shop Talk The Think Tank
1

Hello everyone,

First of all, let me thank you for all the ideas and concepts I have discovered here. Now, to the basics:

  1. I retired from a long military career 3 years ago.

  2. I bought a “mom and pop” pizza business without due diligence.

  3. The business hit about 60% of expectations based on numbers provided by the selling party.

  1. For aprx 6 six months, I worked about 40 hours with too high of payroll relative to sales.

  2. Since cutting staff, sales were even worse, with me attempting to fill shoes of owner, manager, worker, and dilivery man.

  1. Recognizing my weaknesses, I have done the following;

a) after closing for two months to illness, opened gradually with sporadic hours.

b) as health and duty hours improved, opened for more uniform, but reduced hours.

c) have hired additional help and personally trained them.

d) attempted a “weak opening” this past week with adds in the only weekly county newspaper…

e) done a limited “doorhanging campaign.”

f) Have flyers/streamers outside store/“now open” signs outside.’

g) using “Rokk” ideas on customer relations.

  1. Customer specifics:

a) PH, Snappy Tomato, LaRosa, and Dominos are close by and advertise heavily.

b) i have rural area, with no town within 5 miles, but 1500 (aprx 6000 people) subdivision within 2 miles.

c) I am locked into a 3 plus year lease, with primarily a limited d/i, but mostly takeout/delivery.

d) my prices are higher than the chains, but i have a “personal guarantee” to replace/refund" customer orders.

e) customer complaints centered around service, not quality of food.

–to fix that, I have established new, longer operating hours.

– I give my personal guarantee on each item we sell

-- I am available every day to query customers on service

  1. I can’t seem to move beyond the image of a ‘mom and pop" part-time pizza place. I dont’ want a multi-million dollar operation, but would like to at least make a few bucks a month.

  2. I am currently working aprx 80 hours per week, with 3 part-time people comprising 50 hours.

Any ideas most welcome. Thanks.

Pizza Bob

2

slothy,

It seems you’re suffering from inconsistency. Unfortunately, in this business, if you close for 2 months and try to re-open, it’s almost like starting over again. A couple of key things I’ve read:

my prices are higher than the chains, but i have a “personal guarantee” to replace/refund" customer orders.

I can’t seem to move beyond the image of a ‘mom and pop" part-time pizza place. I dont’ want a multi-million dollar operation, but would like to at least make a few bucks a month.

customer complaints centered around service, not quality of food.

I am currently working aprx 80 hours per week, with 3 part-time people comprising 50 hours.

Now, these ideas I’ll offer are mere suggestions so take them for what they’re worth:

  1. If you want to compete for marketshare you’ve got to be competitive in pricing. This does not mean your regular menu price should be lower than the competition but you should offer specials that give the customers a “perceived” image that you have better value than the competition.

When I opened my store it was a little rough at first. I captured a total of 7% of the potential marketshare in my area. I advertised like crazy with a “Buy One, Get One” special for 3 straight months. There was a multi-level reasoning behind this offer:

A. The word “Free” got the customers attention, especially since all my advertising said “FREE PIZZA” on the front in huge font. Under the “FREE PIZZA” it said “Details on back”. That got the customers to take interest and turn the flyer around to look at my coupon offers, along with the BOGO offer.

B. By buying a pizza at regular price, it got my customers familiar with my pricing structure and my menu.

C. This offer attracted customers that would’ve never tried me before simply because of the word “FREE”.

D. It gave my store the image of having significant value. This valued pricing along with fantastic product was a win/win situation. All of a sudden we weren’t just the “best” pizza in town. We were also the “cheapest”. Even though our ticket averages were close to $16 every night and my discounts were 75% of regular menu price on the average.

During the three months of BOGO coupon offers, I saw my customer base increase an average of 150 new customers per week. Since then, I’ve implemented my newest marketing campaign, which I got from Tommieknowspizza. He utilizes a brilliant idea in his stores. His special is “Buy one a regular price, get the next Half Price”. Since I’ve gone to this strategy, I’m still increasing my customer base at the same rate of approximately 150 new customers per week (this week I’m at 124 going into Sunday). The best part is that I’m now generating net sales that are 82% of my gross with average ticket prices in the $18 range. I just had a record week last week and I need $500 on Sunday to break that record to give me two in a row.

As my mentor once told me, “It’s all about marketshare. Create new customers every week by taking them away from the competition”. He was a very smart man and well respected in this business.

slothy, you can’t increase your marketshare rapidly if you’re more expensive than the competition. It just doesn’t work that way.

I’m starting to get tired so I’ll speed the last few up here…

  1. As far as the perceived image of being a mom and pop store, you’ve got to have a name that is catchy. Hopefully you haven’t named your pizza place “Slothy’s Pizza”. You want a logo that is catchy and easy for your customers to identify with. Your store image must have a theme. All colors should flow with the image of this theme. If your store has an “unkept” image, it doesn’t sit well with customer perception. Make it a priority to create an image of a “major player” and you will be considered one.

  2. Service - Simply put: hire more people. The worst thing you can possibly do in this business is get people to order from you and let them down with poor service. You need to be better than your competition (or at least comparable to it) in every aspect of the game.

  3. 80 hours/week with 3 part-timers - I have no idea what your sales averages are but a good rule of thumb would be:

1 1/2 - 2 drivers per $1,000 in weekly sales if you offer more than 50% delivery. 1 insider per $1,000 in weekly sales.

slothy, I hope you can use at least some of this information. Good luck. -J_r0kk

3

J-rokk,

Does you rule of thumb for labor mean full-time employees or part-time?
Just trying to benchmark my operation based on this if it possible
Thanks
Perry

4

Perry,

No, that’s about 20 hours per week per driver. 12-18 hours per week per insider.

I don’t know if any of you have ever experienced this, but when I was coming up in this business I’d always preferred drivers who would work 30-40 hours/week. Those guys were my horses. They’d do anything for me and I really depended on them… until they quit, or their car broke down, or they wanted to take a little break, etc. Then it screwed me… big time.

So now, being a lot older and a little wiser, I’ve gone a different approach. I like to hire two drivers per $1,000 in delivery sales and give everyone 4 days/week with the average work week being about 20 hours. If I need them extra days they’re usually more than willing to take the extra work. All of them understand, however, that I only offer part time work to supplement their existing income. It works well and if one leaves, the others can pick up the slack until I hire on another.

How’s your delivery business doing now Perry? I remember you saying you were just starting it up. Is it really starting to kick in? -J_r0kk

5

J-rokk,

Thanks for the clarification…delivery is GREAT! It has been a smoother transition than I anticipated (thanks to alot of planning and my POS). Lovin’ the higher average tickets and my drivers have been making great $$ so staffing has not been a problem so far. After 6 months we are up 20% from prior year (all delivery). Keep up the good posts and thanks!

6

-J_r0kk,

Thanks for the insight. It makes a lot of sense. With the rural area and keen competition, it is always gonna be a challenge. One thing that hurts me is the local huge subdivision has a community rule “against any door to advertising, to include doorhanging.” I am looking into using the company you referenced in another post on mailings. Brainstorming today, I thought about these options:

  1. Do vehicle window flyers at the local high school and the several huge churches (parking lots during services).

  2. Drop flyers off at local hotels (there is a riverboat casino located 5 miles away); in the past, they have said they have an exclusive deal with a chain pizza place, but I will try again.

Anyway, I am a bit concerned about the propriety of the church “window” drop, as I sure don’t want to offend potential customers.

What do you think? Again, thanks for the pricing and marketing ideas. Am looking at running a buy 1 at reg price, get a 1-topping free–gonna hurt in the short-term, but if I can build a bigger customer base, it will be worth it.

Thanks again,

Pizza Bob

7

Instead of the church window drop. Drop off a pizza to the youth pastor and arrange a fund raiser night where the youth group will get x% of all the sale that are generated for the church. use a coupon to keep track.

By doing it this way you get people in your door that are helping their kids for mission trips or what ever. So it is a win/win situation.

8

slothy writes:

Am looking at running a buy 1 at reg price, get a 1-topping free–gonna hurt in the short-term, but if I can build a bigger customer base, it will be worth it.

I’ll tell you something here. I spent some serious marketing dollars doing this same promotion. My findings: You just don’t get the same kick as buy one at regular price, get one of equal or lesser value free. I have no idea why. Maybe it’s just not perceived as a good offer… I don’t know. If you give them the option of getting two pizzas with whatever they want on them for the price of one, your return will be much greater. You always discount the less expensive one of course. Most times people will get a specialty and a two or three topping, so you’re not out much more food cost, but the benefits of giving the customer whatever they want will come back to you tenfold, so think about that when you’re producing your coupon.

Also, if you can’t doorhang… mail 'em. I’m right in the middle of a marketing campaign where I’m hitting 3,100 homes, 2 carrier routes at a time…

1st week… carrier routes 1 & 4
2nd week… carrier routes 2 & 3
3rd week… carrier routes 1 & 4
4th week… carrier routes 2 & 3
5th week… carrier routes 1 & 4
6th week… carrier routes 2 & 3

Yes, I’m hammering the Hell out of these people. I’m doing this because I got word Domino’s has a stronghold in this area. So far, I’ve produced two record weeks in a row. I’m in week 3 of this campaign right now.

Do vehicle window flyers at the local high school and the several huge churches (parking lots during services).

Be careful with this. I tried the same thing at my local high school and was successful with generating new orders. However, a week later, I got a call from an upset principal who wanted to explain to me the purpose of the “no soliciting” policy on his campus. The same rule might apply to the churches. I would definitely take Daddio’s advice on the church thing. I know of a lot of operators and store managers who’ve teamed up with the churches and had been very successful in doing so.

Good luck. -J_r0kk