In times like these, we’re trying to reduce waste, reduce over prepping, and finding ways to save money while trying to offer a quality product to the customer. I found this little tidbit of information on AOL that proves that when you start changing your product, the customer will know and you may lose more then you’re gaining.
I just went to one of my favorite Mexican restaurants for Enchiladas del Mar: Enchiladas stuffed with shrimp and CRAB. They should have spelled it KRAB cause it was that fake whitefish with red dye on it cr*p.
A lot of those people b*tching on your link are also the cheapskates. Complaining about not being able to load up on the “free” stuff like breadsticks, condiments, and extra vegetables on a sub. We need to be very careful when designing a menu so that it does not encourage this behavior. How many offer free Parmesan cheese or crushed red pepper?
La Madeleine near me briefly got rid of their “free” bread and tried to give you slices with your soup or whatever. The customers went bezerk. Free bread had become a brand item with them. So back came the free bread… and customers continue to purchase a small cup of soup and east half a loaf of “free” bread.
I do not believe in “complimentary” or “free” items. If you offer someone a bag of cat droppings and they turn their nose up, just tell them it is “free”. They will ask for five bags.
Don’t confuse “gift” items with “free” items. Gift items are those you choose to give and are not expected. Such as a “free” drink with purchase of a pizza. On the other hand, free items make the customer feel that you obligated to give them. Think parmesan and peppers. Or maybe drink refills.
You have to think of a way to satisfy the expectation of a certain amount of the free stuff included with a purchase (if that is the local custom) while also capping the behavior of moochers. Some ideas for doing this with say, Parmesan cheese (still you are going to upset people with anything you do):
a. Include a set amount for free if asked. If more is wanted, offer a small 8 oz container of cheese for purchase (like they could purchase in the store).
b. Upscale your cheese and charge for it. “We use real hand-grated Parmigiano-Reggiano imported from Italy so of course a small charge is necessary, but you are going to love the authentic flavor”
Know your customers and decide which ones are profitable and which ones you can lose. This is the principal of “you cannot please everyone”. We are working on a method of scoring every customer based on buying characteristics in order to determine those that are profitable and those that are marginal. We will focus on the profitable customers, try to change the behavior of the marginal ones to be more profitable, and minimize our costs with the ones we cannot change. This deserves a thread of its own to explain, but it basically means we make sure we don’t lose those 10% to 20% of customers that generate 80% of the profits. We try to modify the marginal the behavior of the marginal customers to make them part of that key 20%. And then we limit our losses on the bottom few percent that actually drain profits with mooching behavior.
8.) Remember that value is PERCEIVED. And perception is influenced by much more than just the item you are serving.
Remember that Consistency trumps Quality every time.
In almost all of the examples the customer see’s smaller portions or something they used to get removed/reduced or swapped with an inferior products.
We’ve had a local competitor add less cheese, move to cheaper pepperoni and then move to a cheaper brand of cheese in order to maintain his prices.
I’ve increased my costs gradually every 4 or 5 months as my costs have increased but never reduced quality or decreased portions/toppings.
I’m pretty certain that 99.9% of customers would rather pay a little more than pay the same and get less/worse quality as these examples seem to chow that don’t they!
Are you really using Parmigiano-Reggiano? We pay about 80 cents per ounce for it. We use it on Margherita pizzas, but I would never give it as a take-out. We use regular old parmesan for that.
Totally agree with the comments on this thread. We’ve started shopping for better prices on some paper goods and chemicals. I will NEVER decrease the quality or portions. You have to keep giving people the product that they’re accustomed to; that’s why they keep coming back. I opted to raise prices instead as I believed my customers are buying for the product and not the price. Our increase was significant, and I haven’t heard one peep from anybody.
Nah, was just an idea. What I mean is that you need to change the perception if you are going to charge for something the customer feels you should not be charging for.
I take a slightly different run at the idea: MANAGING portions and quality are the best way to cut the bottom line. Weighing and counting portions for everything will probably make a 10% difference over a quarter (3 months). Buying good quality ingredients with sufficient holding times, marking and rotating products, tracking usage rates to keep track of ordering needs, and minimizing waste due to errors/burning/ticket mistakes/spoilage will make an appreciable difference that will have a POSITIVE impact on customers rather than a potential backlash.
We are looking to streamline and manage. Instead of three 4oz cups of pizza sauce with a 16" cheesesticks, we will drop back to two . . . because of observed and surveyed usage rates. Dine in and takeout customers both use two in the vat majority of cases. When the odd customer asks for another one . . . we will pony up for free for the 1st one.
Nick
you make a good point about portion control but miss the point that Gpizza92 is making. If you CUT into the bottom line you are reducing your profit rather than increase it. Keep your portions the same but make sure they are ALL the same. Ifyour comp side items are wasted by all means reduce the automatic portion but like you said give what you used to if asked.
Portion control has always been an issue - its just that with rising prices its even more important.
Nick, did you read the examples on AOL? Whilst I understand the comment you are making about above (although I’m not sure how you know what take out customers actually use) from the customer perception you may well get the ‘They always used to give us 3 cups of sauces but now only two and we’re paying the same’. Whilst as you say if they ask for an extra then you’ll give it to them what about the customers who don’t expect to need to ask - maybe you need to add this to the menu so that it is visible i.e. Extra sauce available please ask? Last thing you want is for customers to think your cheating them - thats the problem with having large portions that you want to cut back on.
We give all our pizza’s a small dipping sauce for their pizza crust. Whilst we don;t get many complaints some of the most ‘aggressive/annoyed customers’ have been about a missing sauce or the wrong one or I ordered an extra one and it was missing - its the cheapest item on my menu but its caused some really bizarre customer behaviour ‘because you missed my extra dip you ruined my whole meal and as a result the whole evening was spoilt’. I’d hate for people to have a passionate complaint about the missing ‘extra sauce’ even if they’ve never had it!
Daddio is absolutely correct . . . I missed Piper’s rather clever point. He was dead on.
We asked a lot of our regular customers who get the cheesestix. Most use only part of what we give them. We did mull that over, and finally decided that if we put it on the menu, then we will go back to unfortunate cost/waste situations. The goal is to reduce usage as much as possible and increase margins without adding another 50 cents to the price. People will ask for it just because it’s free or just because they always got three . . whether they used it or not. We had a similar situation with wings and dressing. We always put one in, and huge number of customers were throwing it out 'cause they don’t use it . . . now it’s an add-on.
We are introducing a new menu next week (printer made errors printing the one this week). We will have a campaign to let people know that some prices had to go up, and some adjustments had to be made to keep prices modest. Our market is very receptive to being informed. Our order takers will also be informing customers for the first couple weeks about the change in sauce portion.
I also rethought the math . . . and 12 ounces of pizza sauce is MORE than I put on a pizza the same size - plus three plastic cups/lids. . . and I was charging less for the cheesestix. Lose a couple orders a week or not, I have to get that price under control.
We have thought through the options for a few months, and have settled on a blend or price increases and very strategic portion adjustments to manage pricing. We even LOWERED a couple prices, and will be sure to mention those in our newsletter and flyers. Also added new food options, and kept delivery fee the same (after consultation and discussion with our drivers).
You are bringing up really good points, and we have thought of a few of them up front. Our ‘strategic’ decisions may bite us, but we gotta make a couple small hard choices to protect the bigger choices . . . our 16" cheese pizza went up from $11 to only $12 . . . gotta find the cuts somewhere else right now rather than jump to $13 at one bite. That would shock the market. We look in 6 months, and can make changes “by popular demand” to increase sauce portions, etc.