Another recent thread that has wandered off topic reminded me of a useful lesson I learned a number of years ago (as Senior VP with responsibility for world-wide sales for a premium brand in the apparel world)
In business we area always looking for ways to increase sales. In general, more sales is a good thing assuming that the cost of goods plus the cost of increasing the sales does not exceed the growth!
In the other post it was questioned whether forgoing a delivery charge might grow sales (putting aside the questions about customer perceptions for the puposes of this thread). Essentially, this is an additional discount from the current state of affairs described by that poster. Whether a discount comes in the form of dropping a delivery charge, lowering menu prices in general, offering free toppings or just a plain old $2 coupon, what interests me here is the choice we make to use $2 to increase sales.
The premis is that if I offer to give $2 to the customer, the customer will order when he/she otherwise would not or would order more when he or she orders. In pizza, we wander away from this concept due to offers being ubiquitous in the business and considered “normal”… but it might be useful to head back to this fundamental principle once in a while when tempted to offer another, larger discount when sales dip.
Here are some other ways to spend $2 per order to grow sales: 1. Increase your marketing reach. 2 Add value.
Let’s say a store averages about 250 delivery orders per week and the delivery charge in question would come to $500 per week. Use the $2, which comes to $2000 per month, to advertise and especially to reach new customers! THAT will increase sales! In my little market, at least, spending another $10,000 over a five month period would blow a hole in the competition and bring me a good number of new customers to incease my base of business!
For a period of, say 60 days, bring a free salad or a free side with EVERY order. Your cost would be less than $2 on a salad and the free items will increase the perceived value, and in time build support for your other menu items resulting in a higher ticket average.
Offer the $2 to local organizations with large memberships: “For every order we receive during the month of August, we will donate $2.00 to the Boy Scounts” for example…