1st Year Sales

[JacobWV]

This is my first post. I’m curious to know how your sales were in the first year you opened, month by month, vs. your currnt sales and how they have changed over time. I am asking because I am in my 9th month of being open, and my sales have dropped by 50% compared to our first month. I am baffled by this because we hear nothing but good things and positive feedback. In 9 months, we’ve only had one complaint/order returned. And it was literally 2 hours after it was picked up, so the cheese “looked funny” and the pizza was never even touched. I digress… We still have new people coming in every day and saying “I just found out you were here, and I live down the street.” So we are getting a billboard across the street to help with that. I also went door to door myself with door hangers in the surrounding neighborhoods. I keep trying our food just to make sure I’m not putting out anything bad. It’s always good, which helps me confirm all the positive reviews and feedback. But it doesn’t explain the drastic decrease in sales in the last 9 months. Anyone else have a similar first year?

 

[OSV]

Sales fluctuate seasonally, so month-to-month is not necessarily the best metric. January and February, for instance, are usually the worst months in many (most) locations.

Once you move into your second year, you’ll be able to compare to last year’s sales, which is a better comparison.
A lot depends on your customer base, too. Things like kids going off to school usually have an impact. You’ll notice that when the schools are on break, sales will pick up dramatically.

How does your customer count compare? how is your food cost?

It’s hard to trouble-shoot without actually seeing the location, menu, product, numbers, etc.

Assuming that your menu and pricing are appropriate for the area, the biggest sales drivers are quality, service, friendliness and cleanliness.

 

[JacobWV]

Comparing year to year will be a much better gauge, but until then, I keep looking at the steady decline month to month while scratching my head…

Our average sale per customer is still normal, but the number of customers has dropped big time from the first month.

Of the four drivers of sales you mentioned, I am confident in all of those. We always get compliments and praise on everything. Even from people who haven’t tried us yet. “I hear it’s good. I’ll have to come try it.” Yesterday a woman tipped me $10 and said, “I really appreciate your service.” Countless comments on how clean and new everything is. I hear it all the time, “This is the cleanest pizza shop I’ve ever seen.” I have several customers who drive 30 minutes and pass countless pizza shops to come to me and say, “It’s worth the drive. You have the best pizza around.”

I really don’t think we’re doing anything wrong in those four areas. I’m hoping maybe it’s a lack of marketing.

I’ve read before that it is common for new food establishments to kill it the first few months, and then to see a drastic decline.

I know it’s impossible to troubleshoot without hard evidence to look at. I guess I was just wondering if anyone else had a similar 1st year struggle and how things panned out.

 

[MidnightRider]

Hey Jacob! Welcome. I too am in my ninth month of business so I may have some pertinent experiences to share. Before I get too crazy on specifics thoughts, can you tell us a little about your store? Is it carry-out/delivery/sit down? Small town - larger town? Competition? Did month one sales exceed your expectations or just meet them? Now (if I had said nine months from now this will be your sales before you opened how would you have felt about it)? College town/residential/suburb/city?

 

[GotRocks]

I believe what you are seeing right now is what I call; “The new, shininess has worn off”
Everybody checks out the new place, you were heavily talked about when first open, and everyone had to check you out.
Now is when your agressive marketing should be bringing them back in.

Since most people these days have the attention span of a ferret on a double espresso, you need to constantly remind them that you exist.

 

[JacobWV]

It’s a really small residential town about 3,500 on a really busy 2 lane road, about 22,000 cars daily. We started as carry out only, and added delivery 3 months ago. Competition is 2 independent stores and 2 large franchises. Month 1 met my expectations. If you would have told me “nine months from now, this is where your sales will be…” I would have told you that you were crazy.

 

[pizzapiratespp]

We opened a new location ( delco with a few seats ) just 5 weeks ago and have started out quite busy. I am worried about the “new shiny” theorem. Hopefully we keep moving up in sales but only time will tell. We did 13K last week and are breaking even in the profit and loss department. We haven’t done any marketing yet with the exception of passing out a few menus to the area businesses. If sales head the wrong direction I’ll have to do something in the marketing department.

 

[MidnightRider]

So, Pirate and Got Rocks have covered the “new shiny” theory pretty well…one corollary to what they have stated. When I worked for Dominos, we opened some stores in small towns, similar to yours and word of mouth always spread faster and the first month or two we got all of the attention of an attractive new coed that moved to a new school in high school. However, we found that in more suburban or urban areas sales actually “grew” over the first six months or so, before beginning to find their level. In either case there is a “new shiny” period or a honeymoon period that does wear off. This is likely regardless of good or bad service or product.

At my store we have seen fairly steady growth, but I have been very deliberate NOT to have a big grand opening and to slowly build our marketing. We also started from a VERY small opening month total. However, I still some signs of the same kind of thing. Every time I think I am over the hump, cash flow positive, on my way to explosive growth, etc. we have a lull that reduces recent gains. We are still growing just never as fast as I would like. And I see new customers come in and order a dozen times in a month when they first find out about us, but then we never see them again or only periodically.

One thing we might have in common is that we only did carry out for the first 60 days and then started delivery around the beginning of May. I thought this is great it will add on sales we are missing and just get us moving up even faster, but it has a long time to build our delivery customers. The carry out customers have been an easier sell, and more predictable. Delivery customers have taken longer to build that market and now with the snow falling here in the Midwest, our carry out customers have disappeared and we are becoming reliant on a delivery market that we are still trying to build out. So, just when we thought we had a handle on how our business worked and where we were at sales wise our market shifted and changed on us. Deliveries typically go up in the winter or during bad weather, but carry out’s increase in the summer or better weather. If you are a full delco, then I would expect July/August/September to be your slowest months. If you are more sit down or carry out I would expect to see your slower months in January/February as OSV indicated.

Regardless of good, bad or indifferent sales, you do need to be constantly marketing. This can take a lot of different forms and there are many posts more specific to this, but the important highlights are that you include these elements in your marketing…always be doing something - IE continue to be aggressive and always mix in new mediums, new approaches with existing tried and true methods.

In summary, as long as you are able to, fight through the “new shiny” period being over by continuing to market and realize that each new season brings a slightly different market and the first year through you have to build each market from scratch.

Finally, one quick point on the billboard. Billboard advertising is typically used to raise awareness of your business, not to make direct sales. Knowing very little about the situation, I would NOT advise you to use a billboard for advertising. It is good to let people know that you exist, but not very good at bringing in sales that month or that week. I think more than a few operators here have some nightmare stories about billboards. There are a few instances where it could make sense, but for most of us operators they do not make sense. If you do choose to go that route, please make sure you couple it with large quantities of “call to action” type marketing, typically some sort of mailing, newspaper advertising, etc. Something that says “buy now” or “call now”. I would also advise you NOT to sign up for the billboard if it has a long contract term - for me that would be anything more than about 1-2 months. You may regret the billboard and you don’t want to be stuck.

Good luck!

 

[johnmorrison]

just a thought , " this is the cleanest pizza place i’ve ever seen ", when i was a kid my dad used to take me to his favorite place for a sandwich , dirty with peanut shells all over the floor, comfy and well worn , packed with a waiting list ,

 

[boatnut]

Man I have to tip my hat to you… “really small residential town about 3,500 on a really busy 2 lane road, about 22,000 cars daily.” and you decide to open up a pizzeria when there is two indies and two franchises in that small town already? Wow. You must have huge faith in your product. I like that… I also have faith in my product.
It is a constant source of amazement to me the huge differences in the way our two countries/areas citizens act. My first store is in a town of approx 5000 people. Main two lane hwy right through town. Absolutely no way, no how, could four pizzerias survive in this town.
Another major difference…
I understand it’s your guys Thanksgiving today. I read posts here about “get ready” etc… We “get ready” for any family based holiday by reducing staff and prep because it will be DEAD lol… Truth is we will be closing next Thanksgiving day. Yes, really.
Our second store ( in the closest city ) somewhat followed the same sales trend as your experiencing. “Shiny New” seemed to wear off. Continued to get the same exact feedback as your getting and sales dropped. Eighteen months in and we started to grow again. Leveled off at two years in and now waiting for next “growth spurt”…
We are expecting a drop in Jan Feb and plan to then start to grow again in the spring.
DO NOT PANIC. DO NOT send out a bunch of flyers trying to compete on price. The chains will slay you at that. You DO NOT want to build a new customer base of “coupon shoppers”. They order from the store with the "best deal of the week"coupon. Period. ZERO customer loyalty. That’s the chains game. Let them fight it out on price. They will win every time.
Continue to build a quality product, price it accordingly and service the customer. This is your only hope of success… Not an easy road.

 

[GotRocks]

Boatnut;

Great point about trying not to attract the “Coupon Crowd” and end up being stuck with that clientele.
But Coupons do get people through the door, and after that, you can expect to gain some loyal customers on quality

 

[d9phoenix]

My philosophy toward coupons is there are fine when done correctly. If your coupon is only $2 to $4 (no more then 20%) off regular price and gets people into the door, awesome.

If the coupon is 30% or more off the regular price, that is what i consider the “coupon crowd,” and not worth attracting. Plus you will get customers who constantly ask for and employee’s who just give out those deals.

Currently i have about 15 coupons in the system. I have a guide on how my employee’s are to respond when customers ask: What is your deal ? Honestly tho, with aside from the buy one get one free which i can not get ride of, My price points are setup so i make money on all of them. I would prefer everyone to pay regular price, but you do what you got to do to make money.

 

[brad_randall]

All the early adopters tried you, liked you, frenzied* and are now falling back into old habits. This is where having a PoS database and massaging it with 30/60/90 day mailers can help.

…on a really busy 2 lane road, about 22,000 cars daily…

Have you considered offering “hot and ready”? I’ve seen big chains set up a tent in their parking lot and make the transaction right there in the parking lot so the customer never has to leave their auto. It’s more about convenience than price. If I ever had such a location and did a grab n’ go, I’d have a gas station sign with “cheese, pepperoni, combo” (instead of regular, premium, etc…) and change the prices up and down daily as invoice prices on ingredients changed for me - I’m sure that would draw attention. Would also give something to post on social media on a regular basis.

Anyways. If you must discount, I prefer to do it from the high end instead of the low. Offer something off of two or three pizzas or a pizza with sides as opposed to just knocking the price down on any single item - build value instead of devaluing.

• • the “frenzy” is when a new customer really likes you and then proceeds to order frequently until they burn themselves out and fade away back into old habits. Gotta reconnect with them when they are ready to come back!

 

[Diran_A]

• • the “frenzy” is when a new customer really likes you and then proceeds to order frequently until they burn themselves out and fade away back into old habits. Gotta reconnect with them when they are ready to come back!

Wow, I never knew this had a name! Yes, this is me quite often. I never realized I had my own category (blush).

All great ideas.

… I am in my 9th month of being open, and my sales have dropped by 50% compared to our first month. I am baffled by this because we hear nothing but good things and positive feedback.

That can be very frustrating, especially with good feedback from your customers.

Here are the two most important keys when building any business:

1. 
   []Make sure you are making the very best, most consistent product / service you possibly can (which I’m sure you’re doing).
   []Build a community around your business.

Often business owners assume that the community will build itself, as long as you build the best product / service possible. Sometimes that’s the case but to be sure it always helps to make sure you are encouraging, and even promoting it.

For the sake of this post, lets define a “community” as a group of customers that interact with you, your business and each other on a regular basis. Greeting your customers by name with a big smile at the counter is only the beginning. To build a community, you will sometimes have to contact your customers directly through means like email, text-message and/or social media, especially when you have a great deal of competition. There are great automated tools to perform these kinds of contacts for you, but if cost is a concern at the moment you can achieve much of this using some guerrilla tactics like:

1. 
   []Creating a social media page of your choice.
   []Go to an online QR code website and print one that links to your social media page
2. Place a sign at your counter that says, "Scan this code, check-in at (social media page name) and earn a (reward here… it doesn’t have to cost you money to be of value to the customer, so get creative).

By doing so, you’ve given yourself at least one way to reach out to your customers inexpensively. This will work, however I liken this to putting on a spare tire. It’ll get you out of a tough situation, but it shouldn’t be considered a final solution. Once you’re in a position to do so, look for and test several Customer Loyalty engagement systems. Find the one that works best for your needs. Some such services come with a marketing team that works with you to implement all of their available tools at no additional cost to you. Ask questions and often they’ll teach you more than you really wanted to know in the first place.

Using the same idea above, you could replace #3 with “Take a ‘Selfie’ eating your pizza and post it on your own social media pages and earn (reward here)”. This allows you to get exposure to the friends and family of your patrons.

If you’re using some kind of technology at the counter, be it a Point Of Sale system or an independent Customer Loyalty service, you can track when your customers were in last and for those that haven’t been back in a certain period of time you can automatically send them out what I call a “We Miss You” offer, intended to bring the customer back into the store.

More ways to build community, if your store is big enough for it, offer it as meeting space for local groups, sports teams and more. It rarely costs you anything and those that come may end up ordering.

Ultimately, you want every customers possible to willingly provide you with contact information, such as email address and/or cell phone number, so you remind them of how much they love your pizza, lol. “Happy Birthday, Bob, from (Pizza Store name here). Come in today and get a free personal pizza pie on us!”. If your customer base is small enough, a phone call works even better, but an email or text-message is better than nothing at all.

Hope that helps!