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Pricing delema

Daddio

Daddio

Moderator
Staff member
I am in an area where every second call starts with Do you have any deals?. There are a variety of pricing styles here.
Buy one get one free. (but if you only want one it is not 1/2 price)
Buy one at full price get the second at 1/2 price (if you want 3 only one is 1/2 price)
Buy one and the next three are 1/2 price.
Buy a large or xl and get a free medium on pick up only.
Or set your price and what you see is what you get.

So the question is what are the pros and cons of these price structures.
I really hate answering the do you have any deals question. Any advice would be helpful.
 
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I am in an area where we rarely get asked, but when we do we say “Why yes a Large Cheese Pizza for only $11.00” (our regular price with tax)…usually works most of the time…the buy one get one crap I tell them we are not Dominos…i can’t understand places in TODAY’S marketplace with lower margind than ever and stiffer competition that can afford to do that and make money
 
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i have always in the past had one price,but now with stiff competition moved
into my market,i am going all out price wars,and crush my competitors.
thanks to jrokk and all the others on this forum, i have plenty of ammo.just got my mm360s,and now i can really do some mad-marketing.
 
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We have a “Bring Competitor coupons and we will accept them” policy. We advertise this on our doorhangers, mailers, etc. It works everytime. The trick is for them to bring it to our store. ONLY carry out.
 
yes,
this is one of my approaches from big dave
i will except any printed coupon from anywhere in the world and beat it
 
The real question here is not about coupons but regular prices. How do you price you regular everyday product? We all run specials for door hangers and box toppers whether it is BOGO or free bread sticks or pop.
I am trying to decipher the best pricing structure for the every day business.
 
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Daddio:
The real question here is not about coupons but regular prices. How do you price you regular everyday product? We all run specials for door hangers and box toppers whether it is BOGO or free bread sticks or pop.
I am trying to decipher the best pricing structure for the every day business.
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It really is all an illusion anyway!! We all look at our food costs, figure out the margin we need to make and shoehorn some semblance of a structure to meet that margin and entice the customer. Buy one get one is really the same as pricing both pizzas 50% lower and selling them full price. We just sort of ‘con’ the customer into the perception of a freebie. Don’t get me wrong; it is effective and works in lots and lots of places with lots and lots of customers. If it works; use it.

It is just a semantic exercise for us owners.
 
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We have our set price pizzas but offer special deals such as 2 large (13") pizzas for $23.90 (from a selected range) with a choice of half price drink OR garlic bread. They pay extra for The Works or Gourmet variants. We also have a 3 large or 2 Family size (15"). Delivery is extra at $5, $6 or $7.50 depending on what delivery zone they are in.

We find a lot of people buy these deals most of the time. They represent around 15 - 17% saving on normal cost depending on what pizza they buy. Our margins are still pretty good but single orders without the deal are more preferable and profitable.

I guess with our menu the pizzas are all named variants and we don’t do the 1,2,3, topping like you do, we find people like to get the deals when buying more than one pizza. (Nick would understand our menu as I sent him a copy some weeks ago for his wall in his new shop). We are a little different to what I have seen to a lot of menus in the US.

Dave
 
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So Tommy, if that competitors coupon had free delivery printed on it would you deliver it, or still make the customer pick it up?
 
wa dave:
I guess with our menu the pizzas are all named variants and we don’t do the 1,2,3, topping like you do, we find people like to get the deals when buying more than one pizza. (Nick would understand our menu as I sent him a copy some weeks ago for his wall in his new shop). We are a little different to what I have seen to a lot of menus in the US.

Dave
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Yeah. I’ve seen it and was wondering what collor the little pills were before you made the thing :lol: Really, I do see that you have lots of premade variations and categories for what appear to be food costs groups (like how many toppings determines what level of pricing). Then, there is a chart for the various specials with prices for each group/category.
 
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I hate discounting. I spend a lot of time and money convincing people that I have the best pizza around and I only buy the best ingredients in order to make it so good.

But darn it all if not everyone wants the best. This is the pizza business and everyone wants a discount. Actually only about 20% do but they sure seem like everyone.

Here are my current specials based on specific price points of interest to most consumers:

Free Breadsticks with Medium 1-topping pizza for $9.97 - cost=$0.33 food cost.

Large 2-topping pizza for $12.97 - cost=$1.00 off menu price for 2 premium toppings, $0.50 for one premium topping and one regular topping, $0.00 for two regular toppings.

Meal Deal - 1 medium specialty pizza plus 1 large 1-topping pizza for $19.97 - cost=$3.50 - $4.00 depending on type.

I truly believe bundling is the only way to go. It makes each order contribute substantially.
 
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what i did was we have our food cost set at our discounted price, if they look at the regular price and see we sell it for $3.00 less that makes them happy and we sell it for what we really want. example our large is regularly 12.99, but our ideal target is 9.99 which is our coupon price. everyone seems to be happy and its an 18" pie
 
primo:
what i did was we have our food cost set at our discounted price, if they look at the regular price and see we sell it for $3.00 less that makes them happy and we sell it for what we really want. example our large is regularly 12.99, but our ideal target is 9.99 which is our coupon price. everyone seems to be happy and its an 18" pie
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We just raised our price for a 16" cheese to 11.00 . . . . 1.75 per topping. It’s all about what the market will bear.
 
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This may sound crazy to many,But we advertise as the place that offers NO discounts or coupons just the best tasting food in the area.And thank you for voting us again as Best Pizza and Hoagies in area!
Niccademo
 
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I used to try and respond to the “do you have any specials” question by talking about how we try to give the best price every day blah blah blah. But it didn’t take long for me to figure out that doesn’t work at all! What I’ve discovered does work is to move right past that question to something like “you can always get a 16” meatlover for X dollars"…or “our house specialty Ramponi White Pizza is only X bucks.” And I just quote the usual price from the menu and don’t even pretend it is a one night or short term special.

Most people are (1) just looking for ideas, (2) trained to ask about specials because they grew up in the age of Dominoes and/or (3) price shopping and likely to hang up on me, or worse yet, call back (or not) and cancel the order after discovering buffet pizza at the corner gas station.

Since we are not interested in cultivating the business of (3) people, I don’t worry too much if they don’t like my answer. In over three years I only “lost” maybe 3-4 sales because we didn’t have a Special.

In most cases, the callers just order whatever they had in mind anyway. However… at least once a week, they’ll say “that sounds good.” It’s fun when people call up and say “what was that pizza you suggested last time? I can’t remember the name of it but I want another one!” I’ve hooked at Least a half-dozen people on our Ramponi White Pizza that way. Not only is it truly a great pizza, it also happens to have a strong profit margin!

Another technique I recommend is suggesting the higher priced “A” pizza followed immediately by the lower priced “B” pizza…which might actually be a better money-maker in terms of margin…Customers nearly always go for “B,” and so long as it is a good quality product at a fair price, you can feel good about ‘tricking’ them into choosing it.

Whatever you do, don’t recommend your lowest-margin pizza…they might love it so much, you can never get them to move up the margin ladder!
 
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NicksWife:
Whatever you do, don’t recommend your lowest-margin pizza…they might love it so much, you can never get them to move up the margin ladder!
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She even sounds like a pizza business owner, huh? 🙂

No substitute for knowing your mennu and your top 5 profit contributing pizzas. We have even put our 'signature" pies in profit margin order with best margins at top. Suggestive selling is in fine fashion.
 
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NicksPizza:
No substitute for knowing your mennu and your top 5 profit contributing pizzas. We have even put our 'signature" pies in profit margin order with best margins at top. Suggestive selling is in fine fashion.
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Good plan!

Out of curiosity, what are your best margins? Per-topping pies or specialties? I price my specialties at a discount of about one topping. But my best margin pies are my 12" pepperoni at 15% FC and 14" pepperoni at about 17%. Contribution margin is a whole other topic but I love selling the most common pies at my best margins.
 
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