Ok, my small take out delivery and small dine in (future) has been in business since 2000. I have owned it for 4+ years. I have done okay, Pizza Hut and Domino’s been the other chains in the area, 2 other independents and me. The worst thing possible is that a Papa Johns is opening directly across from me in a strip mall end space which will probably have a drive through. Not sure how this small town will support all of us. Good thing (I hope) is that I have 2 new shops opening very soon in close by towns which should diversify me a little bit. But I need advice on how to survive this blow. So far, I am going to open up my small dine in area and offer subs (hot and cold). My prices are already cheaper than Papa John’s but how do I keep my current customer base? Should I directly target my “cheaper than Pap Johns” prices on a store front banner? Could definitely use some advice on how to strategize!
About 3 years ago we went through a similar episode here in our area in West Australia wit Eagle Boys chain opening 100mts up the road from us.
I was at the site every second day finding out how the fitout was doing and asking the estimated opening date. Then they advertised for staff in the local paper with applications closing the following Monday. I took it that they would take the week to interview and the next week to train then open the following Monday.
I organised a leaflet to be inserted in the Thursday (before their opening) edition of the local paper with an offer for a Free Small pizza for the first 150 people
They opened on the Friday and we had our best night ever and the following Tuesday we had people lining up outside our door from 3.30pm for 5pm opening. We stage managed the free pizza night by keeping the doors closed and only allowing 8 or 10 people in at a time (except for regular customers who got straight in). This kept a huge line outside the shop which generated great interest with people thinking our place must be great with this many people lining up.
With the free pizzas we restricted it to 4 variants and the customer had to fill out their details as part of the deal to get the free one. We got a data base to follow up on. We also offered an upgrade to a large size for $5.
In the end we upgraded 30% of the orders, gained 70 new customers and had close to 20 new customers return during the week to order. The upgrade came close to covering all costs for the night with the advertising bill picked up from our major supplier.
We then followed it up by random letter drop by the postman of a free large pizza offer letter to 200 houses in each of the 5 directly surrounding suburbs spaced out 2 weeks apart - suburb 1 200 letters, 2 weeks later the next suburb etc.
In the end the Eagle Boys store never got into full swing and has never hit their projected targets while we experienced a major increase in business which we held and then grew to be 50% up from where we were before they opened.
We gained immense new customers from each of the free offers as once they tried our product we knew they would come back and stay. (We experience around 80% of those who try for the first time return within 2 weeks)
Our whole marketing campaign was based on guerilla marketing tactics, hitting them at their opening and for the next 10 weeks with a free offer to try us rather than pay to try theirs.
Our major cost was the cost of food. We rang up each free pizzas as a full price sale in the till and claimed this as advertising cost. We paid our 10% GST (tax) but claimed the full sale amount as a cost so the Taxation Dept effectively paid for the whole marketing program.
It worked for us and put us up from a smaller/mid size operation to being one the larger Independent ones.
The franchisee of the Eagle Boys told me their head office could not understand why this store was not hitting targets and never has.
To this day they haven’t hit back at us, probably because they don’t do single store activity.
If PJ does any opening deals that draws crowds I would be right outside their doors giving customers a free pizza offer for that day/night in the hope that they will take it up and not go to PJ.
What is your location? City? State? depending on location you do not have to worry about Papa Johns because it is more pricey. But usually they open in areas where they know that customers can afford their price.
Why be cheaper than PJ’s? They are a pretty low end pizza to begin with!
All about service! Stay focused and after the blitz you’ll be fine. If you want to do some advertising, do it AFTER they open.
Hi @eatmorepizzanc. I just rediscovered a PMQ article from 2001 about this very topic.
Looks like their top strategy was honoring all of Papa John’s coupons and promotions. They were effectively benefiting from Papa John’s advertising expenditures. Also, like @314 said, SERVICE is a big plus for you. In the story you’ll find that Papa John’s ended up catching some bad publicity (in the high school newspaper no less) which really hurt their reputation!
I also agree with @bodegahwy, why be cheaper than Papa John’s? Papa Johns already has “cheap” going for them. What else do you have going for you as an independent which can make your brand stand out?