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Anybody not discount?

Disclaimer: I go against the tide in many situations, so keep that in mind… :mrgreen:

I’ll offer a free add-on as a volume discount. That costs less than price discounts. I have offered a point card system, too - buy ten times and get one order free.
 
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But why do you give your food away?..Instead of giving food away after a certain number of purchases why not offer a nice screen printed t-shirt or an embroidered cap?..
 
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Because I’m not in North America… 🙂 Very few, if any, would be worn here. It’s just a different culture when it comes to advertising specialties.
 
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John…sadly, I doubt there are any. Even doing a buffet-style service is discounting, unless that’s absolutely all you do. eg, you sell a 14" pie for $12, but have a buffet AYCE for $5, that’s discounting. Between that and the whole culture set up by chains, where price is the biggest attraction to a product, I haven’t seen anyone in any restaurant situation who doesn’t discount somehow.
 
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Do you know of any car dealers that charge sticker price? did you ever buy an appliance, stereo or TV for suggested retail? Have you ever chosen what beer to buy based on a special?

If you are going to compete in any business area, you must respect the prevailing business model. You can hate it, but ignore it at your peril. In pizza delivery discounting is the prevailing business model.

Discounting will kill you if you do not build it into your pricing assumptions. Remember it is often the discount and not the final price that motivates a buyer.

Price in your promotional program, stop worrying about it, and move on.
 
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Steve,

Are you familiar with Jimmy John’s? They have well over a thousand units and growing. The JJ’s in our town offers no discounts of any sort (combo’s, punch cards) and I’ve never heard of them offering a coupon. Sub competition is just as fierce as pizza and Subway/Quizno’s is taking discounting to new levels of stupidity. And JJ’s does it with a very limited menu. I’m looking at one, it has five items (subs, drinks, chips, cookies and pickles). I kind of like the simplicity and just trying to be really good at basically what your good at.
 
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I do not discount at all. I have a few offers out there for free garlic knots, but never on pizza. I do not deliver. I do about 30% carry-out 70% dine in.
As a personal note, nothing makes me more angry them someone presenting a coupon in front of me for the same product. Lessens the value of a product to me.
We serve the best possible product at the best possible price to everyone.

I also do not have vacation homes and a fleet of Ferrari’s so I could be wrong and leaving money on the table
 
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We opened March of 2010 with the concept of No Coupons Needed to get a great deal at Papa Roni’s Pizza. When we opened it was during the start of the $10 pizza wars between the big 3. We opened with a 1-Price Menu, offering 9 different menu items and combinations for $9.99. In the 21 months since, our 1-Price Menu has morphed into a Value & Combo Menu, now offering 14 combinations, priced from $42.99 to $4.25 http://www.paparonis.com. We do offer some great values on it: 14" 1 item for 9.99; 2-10" 2 items each for 10.49; 12" 3 item for 10.49 etc. Some of the items on our 1-price menu are nothing more than the regular menu price of the item. After struggling to maintain an average ticket of $14 we have decided to focus less on our 1-price menu and more on specialty pizzas, bigger combos, phasing out smaller items, etc.

The owner’s belief (after being brought up in the McDonald’s tree) is to not discount our product. It bastardizes it. Why can you sell me a pizza for 6.99 on Wednesday, but on Friday it is 9.99?!? We will give items away for free to encourage trial, but we mainly just advertise our 1-price menu.

It does make it difficult to advertise in the “coupon books”, so we haven’t done much of that. This was the 1st week using the EDDM program for us and we did see some response from it on Thursday. It is probably too early to tell if it will be a sustainable business model - people want deals! Our sales this year are averaging +42% over last year…but we only averaged $5K/wk our first year.

Dan
 
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Aside from a “special” I run, wherein everyone gets one “special” day a month (see my historical posts for details), I don’t discount anything, ever. A regular discount devalues your pizza, and a discount for a large order just rubs me the wrong way, as large orders are more difficult than small ones. I tell people I sell the best pizza in town, not the cheapest.
 
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I love all you guys that say you have specials but “don’t discount”… or give away an item with purchase… but “don’t discount”. Split the hairs any way you want.

BTW, Macdonalds discounts all the time. What do you think the dollar menu is?

Discounts, specials, promos, specially priced combos… are not incompatible with having the best product or with high ticket averages. Different kinds of offers attract different customers. I prefer to give someone a pint of ice cream rather than a $3 discount but that does not mean I am not using price/value to help drive business.

We have offers out there, coupons, discounts, free items etc. Our ticket ave this week is $41. How is yours?

And large orders “are more difficult than small ones”? Cry me a river! I’ll discount large orders all day long. I hope my competitors are following this thought process! My delivery cost is the same for one 12" pie as it is for a dozen 16" pies. My phone person does not spend 5X as long to take the order and my mortgage, insurance and light bills stay the same. I have those costs built into my price assumption for a $20 order and when I get a $100 order I do not need 5X those costs. If giving some of that up gets me the order instead of you I will do it every time and twice on Sundays.

Smeagol, you wrote last year about matching the big guys $10… which way do you want to have it? I don’t care if you price your pizza $10 or price it $15 and discount it to $10… you are ending up in the same $10 trouble. The point is not how much you discount but rather how much you actually get to charge whether discounted to get there or not. We “discount” but I have not sold a pizza for $10 in years. Our single best selling pizza is five topping 16" pie that sells for about $19 with typical coupon. Yes menu price is $22.50 and we discount… but the point is I get to sell a $19 pizza.
 
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Exactly.

By giving a free pizza for someone who has bough 10 pizzas, it has cost me only 2% off each of those ten pizzas. And I still sell a pizza for about $19, too.

Two for one? No way. 50% discount on second pizza? No way. I do give a free drink (35 cents my cost) or a free dessert (under $1) to a good or new customer without them knowing it’s going to be delivered with their order. They don’t order based on a discount, so they’re pleasantly surprised and that’s better than having cheapskate customers. I’m building brand loyalty instead of servicing the cheapskates.

I’ll let my competitor service the cheapskates since they are not loyal customers. They buy strictly on price and are the first to complain or make up a complaint. I sell my brand and not a price.
 
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I’m not sure that customers who respond to discounts are cheapskates. If we offer the discounts, the customers are being smart/savvy shoppers by taking advantage of them. No different, than when we stock up on a particular item that is discounted by a vendor. The key is, not to train them only to come to us when we offer discounts off the regular price. I remember many years ago when Little C had regular priced pizza. Then they went to $5 pizzas on Mondays. Soon our local Little C operator was busy on Monday and dead the rest of the week. Now they offer $5 pizza’s all the time. Interesting?
 
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They all went bankrupt in my area of the world, too… 8)

You can call them bargain hunters, smart-savvy shoppers or any phrase you want, I think the idea is still the same. They will buy from whomever has the lowest price this week.

If you were my competitor, I would say that you’re welcome to compete in that race to the bottom. :mrgreen:

Since you aren’t my competitor, I advise resisting the urge to fight that battle, especially if you’re an independent.
 
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bodegahwy:
I love all you guys that say you have specials but “don’t discount”… or give away an item with purchase… but “don’t discount”. Split the hairs any way you want.

BTW, Macdonalds discounts all the time. What do you think the dollar menu is?

Discounts, specials, promos, specially priced combos… are not incompatible with having the best product or with high ticket averages. Different kinds of offers attract different customers. I prefer to give someone a pint of ice cream rather than a $3 discount but that does not mean I am not using price/value to help drive business.

We have offers out there, coupons, discounts, free items etc. Our ticket ave this week is $41. How is yours?

And large orders “are more difficult than small ones”? Cry me a river! I’ll discount large orders all day long. I hope my competitors are following this thought process! My delivery cost is the same for one 12" pie as it is for a dozen 16" pies. My phone person does not spend 5X as long to take the order and my mortgage, insurance and light bills stay the same. I have those costs built into my price assumption for a $20 order and when I get a $100 order I do not need 5X those costs. If giving some of that up gets me the order instead of you I will do it every time and twice on Sundays.

Smeagol, you wrote last year about matching the big guys $10… which way do you want to have it? I don’t care if you price your pizza $10 or price it $15 and discount it to $10… you are ending up in the same $10 trouble. The point is not how much you discount but rather how much you actually get to charge whether discounted to get there or not. We “discount” but I have not sold a pizza for $10 in years. Our single best selling pizza is five topping 16" pie that sells for about $19 with typical coupon. Yes menu price is $22.50 and we discount… but the point is I get to sell a $19 pizza.
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I can’t argue the dangers of selling a “half price” pizza - 'Cause I am aware of, and fully agree with them. Which is why I devised my quite complicated, and very popular “special”, which gives everyone ONE day a month to get a great deal. OUR best selling pizza (outside of the Special) is a five meat, one vegie, 15" pizza priced at $24.75. And there is NEVER a discount on that one.
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Ticket average? Don’t track 'em. But our average per pizza is $22.00. (That’s total sales divided by number of pizzas). And yes, that include the ‘Special’ pizzas.
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And I might have different views on big orders, if I delivered. But I don’t. As is, I just can’t see disrupting dinner for 15 groups of regular customers, just to make one huge order - especially if it was discounted, when the regular business was not.
 
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I do not think that the discounting thing is part of the pizza business… however, it is part of pizza DELIVERY I stated early in the discussion: “In pizza delivery discounting is the prevailing business model.”

I agree with not discounting in a sit down business… why? Because, unlike delivery where the cost for delivery does not change with the size of the order, the cost of service for sit-down IS greater with a larger party and therefor you do not have the savings to work with. You have a limited number of seats on your floor and using them has a cost.

The bottom line is that promotions have to make sense.
 
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JohnAndrew:
Subway… is taking discounting to new levels of stupidity.
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They had such a fantastic message with Jared and “Fresh.” Last time I went in there, I paid $8 for my footlong sandwich… and cringed. Why? Because I had that $5 figure in my mind. They have done long-term damage to their brand for a short-term jump in sales.

If you have to offer deals, only discount from the top - not the bottom. Don’t take $ off a single one-topping pizza. Bundle that same pie with an appetizer and drinks and sell it for one price that offers a good value but costs more than a single pizza.

We are changing all the disclaimers on specials to say “carry out & delivery only.” We will be offering a lunch buffet, so I guess we are discounting at lunchtime. For dinner though, we plan on having all sales be at menu price… I’ll let you know how that works out.
 
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Subway $5? All I saw on TV through the month of December was Subway selling subs for $2. What is this going to do to their brand over time? Insane? I know I’ll never want to pay full price for one of their subs again. Not that I can remember the last time I did.
 
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We tried the ‘No Discount, simple honest pricing’ at first. Certainly didn’t work for us, we since have increased prices so they can have a combo or discount. Since then more sales, and strangely enough people are paying more for what they were taking away three months ago but commenting on what a good deal it was.

The end price is almost irrelivant, it’s how its all presented. I am getting addicted to increasing prices and creating combos, works a treat.
 
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