Groupon

[Piper]

boatnut:

Preaches to build your business on quality and service vs selling by price.

Where you’re losing me is the assumption that putting a bundle deal on a coupon or running a family special on Tuesday nights is somehow mutually exclusive with focusing on quality, or is somehow congruent with “selling by price”. I disagree. Trust me, my place is a long way from selling on price. My menu prices are higher than yours. I assure you that nothing I do attracts the bargain hunters… but I still send out carefully crafted offers and specials to my target market.

Even my “specials” prices are still significantly above any chain price. Heck, I’m fairly certain I have the highest prices of anybody posting on this board. My “specials” are no different than the ones posted on your website… I just choose to print them on coupons from time to time and mail them out to customers as a call to action.

Read back to my original post in this thread - I’m completely against using Groupon.

I’m just lost. You don’t agree with ever discounting unless it’s posted on your menu as an everyday special? I don’t think I completely understand what you’re arguing.

You have a family deal on all the time, right? For me, a “deal” would be a suicide mission on Friday and Saturday nights. Heck, the last thing I needed this past Saturday night was more customers - we were already running beyond capacity and were dangerously close to a service breakdown. The intent of running a “Tuesday Special” is to move some of the business to other nights throughout the week where I have excess capacity.

 

[Piper]

boatnut:

Preaches to build your business on quality and service vs selling by price.

Where you’re losing me is the assumption that putting a bundle deal on a coupon or running a family special on Tuesday nights is somehow mutually exclusive with focusing on quality, or is somehow congruent with “selling by price”. I disagree. Trust me, my place is a long way from selling on price. My menu prices are higher than yours taking the currency value into account. I assure you that nothing I do attracts the bargain hunters… but I still send out carefully crafted offers and specials to my target market.

Even my “specials” prices are still significantly above any chain price. Heck, I’m fairly certain I have the highest prices of anybody posting on this board. My “specials” are no different than the ones posted on your website… I just choose to print them on coupons from time to time and mail them out to customers as a call to action.

That doesn’t mean I’m a mad discounter or a price based shop. Read my original post in this thread; I’m adamantly opposed to Groupon or “Daily Deals”. I tried one out because I could and had a good relationship with the vendor doing it. It was, as expected, a bust.

Let’s turn it around and look at it from another way. When people come into my store and look at my menu, there’s no discount for ordering 2 pizzas. They could ask “do I get a discount for ordering two pizzas?” and I’d say “No”. But at your place they would get a discount if they order two, would they not? Or is it that they pay extra for only ordering one? I can get a nearly 23% discount at your place by ordering two large pizzas instead of one. That’s a much larger discount than any of my “specials” ever offer. To me, you’re practicing some pretty extreme discounting there. I would never dream of giving an everyday discount of 23% to somebody just for ordering 2 pizzas.

I’m not disagreeing with your viewpoint; I just don’t think you actually practice what you preach.

I’m just lost. You don’t agree with ever discounting unless it’s posted on your menu as an everyday special? I don’t think I completely understand what you’re arguing.

You have a family deal on all the time, right? For me, a “deal” would be a suicide mission on Friday and Saturday nights. Heck, the last thing I needed this past Saturday night was more customers - we were already running beyond capacity and were dangerously close to a service breakdown. The intent of running a “Tuesday Special” is to move some of the business to other nights throughout the week where I have excess capacity.

 

[Pizzamancer]

Boatnut - Your premise is based on a logical fallacy, and it damages your credibility. Coupons and discounts, when done well increase your profits. This is a hard fact.

If you don’t do it, someone else will, and in an ever more competitive world, doing less means losing.

 

[boatnut]

Then I saw less than 0.1% of those customers (yes that is one out of 1000) come back to the store for a regular priced pizza.

Western Canadian customers are different? I’m really starting to believe there might be a big difference in the thought process of consumers in different areas? It would appear from a number of responses here that if the above results occurred at your store from a coupon, that would be unusual?
It is the NORM here. There are two kinds of customers here, price buyers (coupons) and quality buyers.
They don’t mix. Maybe they do in your area. Not here.
You know when you get that local newspaper and the centre of it has over an inch of flyers? I took it upon myself to ask my customers if they looked at them. The response? Overwhelmingly, NO. They do the same as me, throw them out without even looking… Why? Because they are NOT coupon buyers.
I DON’T WANT coupon buyers! I know you all seem to have a problem understanding that. I don’t like them.
I need to make enough of a profit on every single order so I can maintain my quality and content and customer service. I have ZERO interest in trying to move some of my Friday night customers to a discounted Tuesday. Why? I have more than enough capacity ( Twin stack XLT3270 split belts )and schedule enough staff to deal with our Friday slam. Very very few (if any)of my customers would move for price.
As somebody said, I would attract new customers. COUPON ONLY customers. Do not want nor need them. Didn’t want them when I was losing money starting the new location, don’t want them now.
They would be my “loyal” customers until the guy down the road sent out a cheaper deal…

Tuesdays are quiet. Perfect. We use Tuesday to do a weekly oven cleaning, empty the freezer and wipe down etc etc… Way prefer that to being busy on Tuesday, working hard to make little to no money.

If you don’t do it, someone else will, and in an ever more competitive world, doing less means losing.

As a previous post stated, “they” have done it . And lost… Why? Because my customers are NOT coupon/price driven. They are loyal to our product. The coupon buyer is not.
The “family meal” might just help me show that. Between the two locations we do less than 20 a month. We will be removing it from the menu when we get new menus printed next few weeks.

 

[boatnut]

I think I just got it… I mean the underlying basic difference in our thought process…
You goal is to increase volume thus increasing profit.
My goal is to increase profit with as little volume (work) as possible.

Taking it to an extreme… My ideal would be to sell ten pizzas a month vs a few thousand and make the same as I make now.

I could greatly increase our volume by extending our hours as well. No interest. PROFIT would not increase.
Just volume.

 

[Piper]

Well you don’t seem to ever answer any questions, but I’m going to ask one more time, directly, and then be on my way:

Why is giving a 23% discount for ordering two pizzas at your place not “discounting”?

 

[boatnut]

Or is it that they pay extra for only ordering one?

BINGO…

I just re-read the previous post’s and had missed that…

Or to put it a different way… There will be an extra charge for a “half order”…
Kind of a common practice eh?
Your logic could be applied to any menu item on any menu. Hamburger and fries cost’s less than Hamburger and a separate order of fries. Discounting? I say no. Regular menu item, full published price. If somebody want’s to order them separate and pay a premium, work out.
Hamburger and fries this Tuesday , regular $9.99 , $7.50 on Tuesday only = Discount.
Two pizzas cost $**** = Regular full price menu item available every day.
Only want one? You will pay a premium.
Love it when people only order one… Less work, more profit.

 

[Piper]

boatnut:

Love it when people only order one… Less work, more profit.

No, less profit. Your food cost percentage is lower when they buy one, but you make less profit (unless you have the most inefficient kitchen in the history of pizza making.)

You should want everybody to buy two at the discount, er “non-premium”, price. More money in your pocket. Where I come from, that’s what’s called profit.

If you truly feel that way about people ordering only one pizza, why don’t you just get rid of the 2 for 1 pricing structure?

 

[Daddio]

Piper:

If you truly feel that way about people ordering only one pizza, why don’t you just get rid of the 2 for 1 pricing structure?

I did exactly this and am glad I did. In defense of boatnut’s business model it is a western Canada mindset that pizza is sold 2 for 1. The most common question I am ask , “Are you 2 for 1 or what?”. Usually those are the same people who will buy the groupon.

 

[boatnut]

So Piper, an explanation of my madness…
There isn’t one lol…
You have to understand that I am so crazed I “fire” customers. I average two a month.
What get’s you “fired”?
Trying to BS us about making a mistake taking the order. Bullshit. We read the order back TWICE.
( I swear you could read the order back to most customers and add " Plus a side of come over to your house
and kick your dog till it pukes" and they would say yeah, ).
They do not listen…
Telling us your pizza was cold.
Our pies come right out of oven, are cut and boxed, placed in plugged in Hot Bags that maintain temp at 170+ , then plugged in to drivers car. Bullshit. They are not cold. We test the bags on a weekly basis with a laser spot temp gun. We check the drivers 12v outlets are working at the start of every shift.
Bottom line is if you try to bullshit us, your fired…
Yes, we do make mistakes. We replace any "mistake’ with a 100% replacement of order. Do not care if we just forgot the one can of coke. Next order on us. VERY rarely happens.

I am somewhat akin to Seinfelds Soup nazi. I give customers a great product. It stands head and shoulders above what others offer. If they want it, I will make them pay. AND play by my rules…
Is it the best pizza in the world? Probably not. Is there people who would say there is better available locally? Maybe. <<<< I DO NOT CARE >>>>
Up until 6-8 months ago the pizza biz was kind of a hobby/sideline biz for me. I retired from my other life and now have the pizza biz. I can operate it how I WANT TO vs how I am SUPPOSED TO. I go out of my way to do things that fly in the face of the accepted “norms”. Funny thing is it seems to work. At first I thought it was due to having this unique location in a small town, no major chains to compete with etc etc.
Opened up in the city. Yeah, different. Took a little longer than I thought to build that customer base. Real customers. That will pay. That know and want quality. We are now breaking even after 8 months…
We will be rockin in a year.
Three Little Caesars, two Pizza Hut’s and a Domino’s could open up next door and I would retain my customers… BECAUSE I DO NOT DISCOUNT/FLYER/COUPON my food. My customers have zero interest in that type of pizza or marketing. They want high quality real food.
That isn’t me talking, my customers tell me this every day…

 

[Pizzamancer]

boatnut:

I can operate it how I WANT TO vs how I am SUPPOSED TO.

Good enough, at least you realize this. Now I can stop trying to convince you how your ideas fly in the face of traditional common sense and economics.

I think that it all comes down to where we draw the line at for incremental income. I know guys who will literally stay open for lunch to get an extra $50 in sales because ‘rent is the same’, completely understanding that they just traded 6 hours for $1.50 in profits. That kind of baffles the mind.

 

[royster13]

Pizzamancer:

I think that it all comes down to where we draw the line at for incremental income. I know guys who will literally stay open for lunch to get an extra $50 in sales because ‘rent is the same’, completely understanding that they just traded 6 hours for $1.50 in profits. That kind of baffles the mind.

Sometimes closing for lunch can create more sales by forcing customers to make larger special orders…A few good size orders placed the day before can often make you more money than actually staying open and hoping the phone rings…And if there are no orders, you can enjoy the time off…