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If You Could Only Use One Promotional Tool...

Personal favorite that I have is Magnets a highly attractive magnet with logo and nice slice of pie on it. Also Last time I got ones that had a little calender on it so people throw them on the refridge. That way at the end of the night when they go into the fridge to look for dinner, BAM there is my advertisement right in their face. People dont always like to cook after hard day at work, and a little reminder that my ovens are always on
 
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For us it’s been solo direct mail. From postcards to coupon packets. Our last two attempts on Newspaper inserts gave us a dismal return. We get about 5-10% return on our solo direct mail pieces.
 
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How do you measure return?..I think the best measure of return is not the percentage of redemption’s but rather how how much you spent on them…I have no idea if a return of 5% to 10% is any good at all because you have not said whether or not the 5% to 10% was profitable…I suspect it is, however, it is just a guess on my part…

In my area it costs approximately 11 cents to send something by “Unadressed Admail”…(Canada Post’s bulk mail service that goes to each house in the area picked)…The local newspaper will go as low as 4 cents each…So the return from the newspaper can be much lower and still work out equal in cost to the bulk mail…

I will try to illustrate this in chart form…

Cost per 1,000 menus mailed out…
1,000 x 0.05 for printing - 50.00
1,000 x 0.11 for mailing - 110.00
So you have 160.00 invested…And for this example you get 75 orders per 1,000 (7.5%)…cost per order 2.133 each…

Cost per 1,000 menus in newspaper…
1,000 x 0.05 for printing - 50.00
1,000 x 0.04 for insert - 40.00
So you have 90.00 invested…And if you get just 42 orders per 1,000 (4.2%) your costs per order are close to the same…2.143 each…

Say your average order was 15.00 each and they cost you 2.14 each…Your cost in both examples is about 14% of sales…In the short run this is very high, however, by the time you factor in futures this number goes down…Now I have no idea whether or not you business can sustain this on an ongoing basis…
 
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royster13:
How do you measure return?..I think the best measure of return is not the percentage of redemption’s but rather how how much you spent on them…I have no idea if a return of 5% to 10% is any good at all because you have not said whether or not the 5% to 10% was profitable…I suspect it is, however, it is just a guess on my part…
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There’s the secret of any direct mail campaign… Your rate of redemption doesn’t really matter. You need to be tracking the ROI. I could send out a coupon for $1.00 pizzas and get a 50% return rate, but I’d be losing money on every order. Don’t get hung up on redemption rates.

I track the ROI on every single campaign I send out. ROI is calculated based on Gross Profit, not Sales. I’ve seen a couple of industry “consultants” use sales, and that isn’t remotely correct - you might as well not be tracking it at all.

I also track how many new customers the campaign generates. If I send out a bulk mail that pulls a huge ROI but only generates 5% new customers I know I’m wasting my money - those customers will already be getting by database mailings.

Which brings me back on topic. I completely agree with Nick - if you give me just ONE promotional tool it would be my database mailings. Mailings to customers that have ordered in the previous 60 days routinely generate ROIs in the 600-700% range. It is truly the lowest hanging fruit.
 
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Sorry to get a bit off topic but I believe that the single most important aspect of any advertising campaign is the life long value of the new customers that it brings in.

Here’s some hypothetical #'s:

Lets say you spent $350 to send out 1000 postcards.
You got a 2% return = 20 new customers.
Those 20 customers have an average ticket of $18 = $360 in sales.
Minus $100 in food cost and your around $260.
So at first look it seems like you lost $90 for this mailing campaign.

Some people may look at those numbers and not do another mailing because they didn’t initially make a profit. What they fail to take into consideration is the life long spending value of those 20 new customers. If only 5 of those 20 become loyal customers you’re way ahead of the game. If those 5 go on to order once a month ($18 ticket average) that would generate $1080 in sales within a year as a result of that single postcard mailing that they originally thought they lost money on. With out doing that postcard mailing, those 20 new customers may have never ordered from them.
 
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Good point Roger, I forgot to mention that in my post above yours…

Sometimes I may send to a route that generates a -10% ROI but 80% new customers. Although I lost money on that route it’s going to be green-lit to be hit again in four weeks because I know it’s fertile ground. That’s why I think it’s very important to calculate both ROI and percentage of new customers.
 
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After doing a direct letterbox drop to a new suburb, this would be the way I would go. Recently we dropped 95 letters for a free pizza (obligation free) to every completed house in a nearby new housing estate. Included in the envelope was a menu and fridge magnet. Response has been in excess of 25% redemption with over 70% returning to re-order within 2 weeks. Some have become weekly purchasers with average ticket price of $30+.

Finding and bringing in new customers is what it is about. If you give good service, high quality product, value for money (and I don’t mean cheap - we are at the top price level) and welcome every customer equally you will keep them without having to bombard them with deals and offers.

Find some way of bringing in new customers, be it with direct mailing, movers letters, letterbox drop / door hanging offering a free pizza. If your product is good then they will return. We said this in our letter - “why free? Because we know once you taste our pizzas you will come back for more” - and they have.

We also target new home owners / renters through real estate agencies who give out a free pizza letter (including menu and magnet) when they hand over the keys to their customers. Redemption is high but as some purchased out of our area the follow up sales are not quite as high, but still good.

New customers are the lifeblood of any business.

Dave
 
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Has anyone ever tried a calender. I would think they would to expensive plus the cost to mail but I am sure there are some very creative ways to get them into the customers hands who are you seeking the most. You could certainly do a lot with them as far a whole years worth of planning and specials. Something I will consider. Has anyone here used them before ?
 
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I would suggest making sure your website is up to date. Make sure you have your menu, specials, package deals, address and phone number available. We only really order from 1 pizza place and we check the internet every time.
 
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This is just a “rough” number based on a review of my last 50 or so magnet orders…But about 30% of my clients do not have any kind of web presence…
 
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So, please indulge me on this… I don’t mean to hijack…

This is going to sound costly, but I haven’t heard of anyone doing this (certainly not in my area, at least.)

We have just gotten our mag stripe gift cards, which also have guest loyalty abilities, and I’m really stoked to get them in use! Getting away from paper gift certificates is going to be a huge benefit!

I was just pondering mass-mailings (I use the term loosely, as there aren’t MASS quantities of people in my area), and I thought about pre-loading some mag stripe cards and sending them out in the mailing. I’m thinking it could be something more tangible and reusable than a paper coupon, and would hopefully encourage people to keep the card with them. To redeem the card, we would require entry into our POS database, and offer the guest to sign up for our loyalty program.

This is just a thought… maybe a beer or two into it… :lol:

Yes, I know this will be a costly method of marketing. Any thoughts?
 
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Mr Kona is there away to charge the cards remotely?..And I suppose the answer is yes because I can “re-charge” my Tim Card without being close to Tim Hortons…Please correct me if I am wrong…

So you can distribute cards with no value and create a web based signup form and once they have signed up (and given you all the required information) you can “charge” up the card with enough value for them to get a menu item or use that value towards another purchase…

As far as I know, you can do “bulk mail” with as few as 200 pieces…I have access to postcards that can have magnets and/or wallet cards attached to them and still qualify for some form or permit mail…But the particular supplier I have in mind does not do gift cards…

While I have access to gift cards, I do not know very much about them so it would be best deal with someone far more knowledgeable than me…Where did that Gorilla woman end up?..

But back to the gift cards…I am going to assume they can also be attached to postcards and mailed…Maybe your gift card supplier can do a mailing for you…Please correct me if I am wrong…The gift cards come with some sort of serial number and that can be read via the bar code?..And you can give a certain serial number a value without having the card in hand?..If so, that works for the idea above…

Now this may help a bit or may drive you to a couple more beers…lol…
 
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That’s pretty cool! This is pretty close to what I was envisioning, and since I already have the gift cards in-house, it would be pretty easy to design a letter to go along with the card.

Thanks for the insight Royster and Patriot! Definitely something to think about…
 
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There does not seem to be any pricing on 866propizza.com so the 1st thing that came to mind was “ka-ching”…But it if works the price may be worth it…There is no doubt that good use of “variable data” will improve response rates…And if you only have a limited number of “targets” you want the highest response rate you can get even it if costs you more…

But I am curious what a letter like those and a fridge magnet for a free pizza would do…If the redemption rate is reasonably close and the cost is way less, you might be able to do a 2nd mailing to get as good of overall results as the 866 Pro Pizza thing but at a lower cost and hence a better return on investment…

Maybe on a postcard mailer like this…http://tinyurl.com/qqpz2b Prices include postcard, peel off magnet, inkjet addresses, mailing (not postage)…If my reading of bulk mail rates is correct, postage is about 28 cents for standard mail (min. 200) and about 40 cents for 1st class (min 500)…
 
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I don’t recall the prices, but, yes, it is a bit costly…

My plan was to incorporate a magnet as well…

They use a two window envelope & ink jet the address on the letter…
 
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Although I think your idea may be a good one I am just wondering if it is worth the cost. I would imagine your cards are around 40 cents and then mailing the letter and card will be another 44 cents. Seems to me you could get a fantastic post card actually two designs and mail them 3 weeks apart and get more bang for your buck.

It would get your name in their face 2 times rather than one.

Just throwing that out there.

Kris
 
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Ohhh yeah and not to mention you are giving them real cold hard cash…no matter how you look at it. They can eat for free…where a coupon still allows you to make money, get the names in database, do quanity in your face advertsing not to mention if you deliver you will have a hard time there.

Just playing the other side of the coin…

Kris
 
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I don’t deliver, so that shouldn’t be a problem. The idea of cold hard cash is Exactly my point! Discounts have been done to DEATH, especially in the pizza biz… To have a reusable card in their posession, rather than a paper discount that will more often than not get thrown away could be a point of difference.

The amount on the gift card wouldn’t be enough for a fully free meal, or using the guest loyalty aspect of it, it could be a “come into the restaurant and see what your card is worth” kind of a thing… The vast majority would be maybe for $5, with a couple of “big winners” thrown in to make it interesting.

I truly appreciate all the ideas and feedback! It’s giving me a lot to think about! Thanks guys and gals!
 
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Two things from a newbie:
  1. How do door hangers compare to direct-mailings. I have lots of eager teenagers willing to drop door hangers; and
  2. Has anyone tried the “do not open until the next visit” coupons like Houlihan’s uses? Basically, you give existing customers an envelope which contains a mystery prize - anywhere from a free appetizer to $xx.xx or some variation. The kicker is that they cannot redeem the coupon unless it is in the original unopened envelope.
I am not a coupon person. I cannot remember using a coupon in the past 2 years. Except, I used the Houlihan’s coupon 2x…

pc
 
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