"Sorry, no substitutions"

[boatnut]

‘If you have to discount your product to keep a customer happy you have a problem with your pricing or your product.’

and

‘Nice in theory’

I’m sorry but I think that’s just plain wrong and a pretty cr*ppy comment.

I apologise to all if those comments offended. That was most certainly not my intent. I have just re read this thread ,and yes, I do sound somewhat like a pompous a-s-s*#@$ on the defensive. Maybe because I am obviously in the minority. I’m ok with that. In fact one of my favourite statements is: " If I start to appear normal, please shoot me and put me out of my misery". Our Aussie friend states that “you guys do it different in the USA”. I guess we do it different here on Vancouver Island as well. Wizzle, I stand by what I said. If you discount your product once, you have just set the expectation of a future discount in your customers mind. Here in Canada we have a chain of stores called Canadian Tire. Kind of a hardware store. They sell there own brand of tools. They go on sale for 50% sometimes 65% off all the time. They are actually a very high quality Snap On imitation with a no questions asked lifetime warranty. Guess what? Hardly anybody buys them unless there on sale. Sad thing is the regular retail price is a great value.
Same story with Paderno cookware at the Hudsons Bay chain. Allways going on sale at 50% off. Nobody buys it at retail.
Why would they? The customers are trained to expect a discount.

In retrospect I think the point I am trying to make is that us independants do NOT need to discount. We should be proud of our prices and product. If somebody wants cheap, they have the chains. If they want quality, they have us.
If discounting and specials make you busier, ok. If you are ok with a lot more work (volume) to generate a smaller margin (albeit a larger bottom line) fine. Don’t forget about the extra staff. Isn’t it great having to hire and train staff? How about another cooler to store that extra product in? etc etc. I just don’t get it though. I personally do not like work.

 

[stebby1]

Just out of curiousity, for those of you that don’t do discounts, how do you handle the customers that call in and ask “what kind of specials do you have tonight?”

 

[Daddio]

stebby1:

Just out of curiousity, for those of you that don’t do discounts, how do you handle the customers that call in and ask “what kind of specials do you have tonight?”

You tell them they can get a loaded pizza and a pepperoni pizza and a bottle of soda for 22.99 (what ever the regular price comes to). Half of the time they order something else anyway.

 

[Registered_Guest]

boatnut:

If you are ok with a lot more work (volume) to generate a smaller margin (albeit a larger bottom line) fine.

Hmm. Isn’t a larger bottom line the point of being in business? I’m in business to make money - as much as reasonably possible. If I don’t have the finest, highest quality, most expensive pizza - so what.

As I’ve said here before, I’ve seen at least 6 “great” pizza shops in my area come and go in the past couple of years. I’m sure they were using Grande Cheese, and xxxxxx pepperoni, and had guys directly from Italy monitoring their pizza making via webcam. Not enough people gave a crap about that. Their business sucked, but I guess their pizza was great! So what.

 

[boatnut]

Stebby1… my staff tell people " We have quite a few House Specials". (we offer 8 pizzas under our “House Specials” catagory). They will then start to list them. Same theory as a lot of sit down restaurants, they have a daily “feature” item, not a price special. If pushed , we explain we do not sale price any of our pizzas on certain days, that way all our customers pay the same,everytime.
Registered Guest…As to being in business to make as much money as reasonably possible… I 100% agree with that statement. But it depends on your definition of reasonable.
Some people would say working six or even seven days a week is reasonable.(Upon initial start up, yes it is.)
Very rarely taking a holiday is another fairly normal trait of the small independant business person. To me these are both unreasonable. Unfortunately they seem to be very “normal” though. Putting up with unreasonable demands from a difficult customer is another area that seems to be accepted as reasonable. Again, I do not believe it is reasonable at all.

About those failed “great pizza” shops… Demographics should dictate your business model. Were they right for a high quality, higher priced product? Did they try and compete on price? How many other stores are within a 4 mile range? Would my model work if I was situated in a low income housing project area with high unemployment? No. Does it work if you want to squeeze every single dollar out of your business without any concern for hours worked or stress, no. ( We open at 4pm, close at 9pm apart from Fri-Sat close at 10pm). Would we make more money staying open later? Yes. The cost? Extra staff, maybe losing some existing staff, putting up with drunks, stress… unreasonable in my opinion.

Do I understand the frustration and heartache felt by a lot of people fighting to survive? Yes. My brother-in-law lived it. Opened up grossly under capitalised. Needed to take a wage from the store right from the start (that in itself is a huge problem for any small business). He worked 7 days a week, produced a higher quality pie, was in retrospect in the wrong area and eventually closed up shop. Great product, worked himself like a donkey and still failed. He is now my manager.

 

[Gpizza92]

stebby1:

Just out of curiousity, for those of you that don’t do discounts, how do you handle the customers that call in and ask “what kind of specials do you have tonight?”

Caller: Do you have any specials tonight?
Me: Not tonight.
Caller: Okay, I’ll have a XL pepperoni

Out of 10 callers looking for a special, 8 still order if I’m not running one. I offer coupons, but my offers are still more expensive than my competitors. The high-volume, low price philosophy works we all know that. I’m not a fan of it. I personally believe if the only reason somebody buys my product is because it’s cheap, I may need to look into a new product.

 

[perfect_pizzas]

Caller: Do you have any specials tonight?
Me: Not tonight.
Caller: Okay, I’ll have a XL pepperoni

Out of 10 callers looking for a special, 8 still order if I’m not running one. I offer coupons, but my offers are still more expensive than my competitors.

Instead of telling your customer you don’t have any specials why not suggest an extra large 1 topping with a 2 liter for ONLY xx.xx. This could be your regular price if you don’t want to discount. However, discounting .50 or 1.00 on a combo special or a two pie special makes your customers feel like they got a deal, while increasing your average ticket price. Suddenly 9 or 10 out of 10 callers asking about specials place an order and sales and profit increase.

 

[Wizzle_Wassell]

Gpizza92:

Caller: Do you have any specials tonight?
Me: Not tonight.
Caller: Okay, I’ll have a XL pepperoni

lets try that from me:

Caller: Do you have any specials tonight?
Me: yeah we’ve quite a deals {we’ve only about 5 deals all in} what kind of thing are you looking for?
Caller: Well I’d like to have a XL pepperoni
Me: OK we’ve our xyz meal deal for just $5 extra you can add chicken and soda.

Even with with a higher food cost I’ve got a better ticket price, margin and the customer got great value!

Is my approach cheap? No
Is it high volume/low quality? No
Are my delivery costs the same? - yep
Are my labour costs the same? -yep
Is my bottom line bigger? - sure is!

Providing I’m costing my deals properly and I’m happy with the food cost then what’s the problem?

Even if they don’t take the offer I’m still in a no worse position than you. And to be honest I can’t recall the last time someone rang, asked what specials we had an then didn’t order. I do however get a few who call, place an order and then decide not to order because we’re too expensive - which just shows you can’t be everything to everyone!

 

[Napoli_Pizza]

boatnut:

I recently called our top 200 volume customers and asked them: " Our cost’s have increased to the point I have to make a choice. I can reduce or lower the quality of the toppings/cheese OR I have to increase the prices by approx 8%.
Which would you prefer? "

you called 200 customers? Somedays I don’t have the time to call my wife!

 

[wa_dave]

Napoli Pizza:

boatnut:

I recently called our top 200 volume customers and asked them: " Our cost’s have increased to the point I have to make a choice. I can reduce or lower the quality of the toppings/cheese OR I have to increase the prices by approx 8%.
Which would you prefer? "

Somedays I don’t have the time to call my wife![/quote]

Most days I make time not to call my wife :lol:

Dave

 

[boatnut]

you called 200 customers? Somedays I don’t have the time to call my wife!

I realise that you probably said this with a grin on your face. However, if so, it was probably said with a certain element of truth.
This is exactly my point. If you are the owner/manager you should have nothing but time to interact with your customers, train staff, monitor food costs, review staffing levels, research advertising, do customer call backs, etc etc.
However, if your so busy cranking out the pies trying to make a living because your margin dictates you have to sell a million pies on a Friday night, and your the one makin the dough, cutting the pepperoni and cookin ,maybe, just maybe,
you love doin it OR you could reduce your volume and increase your margin by quiting the discount/coupon thing and actually have some time to manage your business instead of working at it. I have a few very very wealthy friends that all share the same belief. Work smart, not hard.
When I bought my little place , 537 sq ft, the previous owner worked on location about 60 hours a week. He sold it because, and I quote him, " I’m working for minimum wage".
Same location, same town, basically the same menu, different price, lost the 10% off for pickup, lost the “specials”.I’m an absentee owner and I make considerably more than minimum wage.

 

[Wizzle_Wassell]

boatnut:

I recently called our top 200 volume customers and asked them: " Our cost’s have increased to the point I have to make a choice. I can reduce or lower the quality of the toppings/cheese OR I have to increase the prices by approx 8%.
Which would you prefer? "

I’m just a little confused by your stance. If you are (as you appear to be) so firm in your belief that people will pay for quality then why would you phone your ‘top 200’ customers and give them the option of reduce quality or increase price? That doesn’t make sense really does it?

 

[Registered_Guest]

Wizzle Wassell:

boatnut:

I recently called our top 200 volume customers and asked them: " Our cost’s have increased to the point I have to make a choice. I can reduce or lower the quality of the toppings/cheese OR I have to increase the prices by approx 8%.
Which would you prefer? "

I’m just a little confused by your stance. If you are (as you appear to be) so firm in your belief that people will pay for quality then why would you phone your ‘top 200’ customers and give them the option of reduce quality or increase price? That doesn’t make sense really does it?

GMTA.

 

[boatnut]

Simple answer why I called my top 200 customers. I call my customers quite regularly. I , or one of my staff, will randomly call back customers throughout the week and enquire about delivery times, driver attitude etc. I do not have a set schedule where I call the top 200 myself, just do it every couple of months. I ask them how we are looking after them and if I am considering making a change I’ll ask them for their opinion. Makes them feel quite special. I chose to ask them about the pricing choice this time due to the current economic climate.

 

[Registered_Guest]

Boatnut,

Do you think that your “survey” might be a bit skewed since you called your top 200 customers? Of course your top customers are more likely to be okay with a price increase than anyone else.

I’d be interested in knowing this - if you called your “bottom” 200 customers ask asked them (in some way) why they were your bottom 200 customers - what would they say?

 

[Gpizza92]

Wizzle Wassell:

Gpizza92:

Caller: Do you have any specials tonight?
Me: Not tonight.
Caller: Okay, I’ll have a XL pepperoni

lets try that from me:

Caller: Do you have any specials tonight?
Me: yeah we’ve quite a deals {we’ve only about 5 deals all in} what kind of thing are you looking for?
Caller: Well I’d like to have a XL pepperoni
Me: OK we’ve our xyz meal deal for just $5 extra you can add chicken and soda.

Even with with a higher food cost I’ve got a better ticket price, margin and the customer got great value!

Is my approach cheap? No
Is it high volume/low quality? No
Are my delivery costs the same? - yep
Are my labour costs the same? -yep
Is my bottom line bigger? - sure is!

Providing I’m costing my deals properly and I’m happy with the food cost then what’s the problem?

Even if they don’t take the offer I’m still in a no worse position than you. And to be honest I can’t recall the last time someone rang, asked what specials we had an then didn’t order. I do however get a few who call, place an order and then decide not to order because we’re too expensive - which just shows you can’t be everything to everyone!

All valid points. My only argument would be will that same customer now buy from you without that special? As I posted before, 8 of 10 will still order even there is no special, so that arguments holds no water. Tell you what in June I’ll run a phone special. I’ll even start a new thread where I’ll lay out my ideas and get some of yours and after a month I’ll report back with my findings.

 

[brad_randall]

boatnut:

We offer the same special 100% of the time. None. Nada. Full price every single time.

http://www.pizzability.ca/

“So, I can get one small Meatlovers for $13.50 or I can buy two for the discounted price of $22.95?”
“Oh my, No! We offer two Meatlovers pizzas for our regular price of $22.95, but if you’re only wanting one we offer that for the premium price of $13.50. You see, we never discount!”
“Ah, very good. In that case I’ll just have your Family Meal #1 and add 10 wings and an order of crazy bread.”
“Okay, that’ll be $24.95 plus $7.50 for the wings and another $5.95 for the crazy bread for a grand total of $38.40 plus applicable taxes.”
“Oh wait… now I see that’s the same thing as your Family Meal #2!?! Why don’t I just get that instead for $34.95 plus applicable taxes?”
“…”
“… is, uh… is there a problem?”
“Sir, I think you should leave now.”

 

[Registered_Guest]

Wow Boatnut - I didn’t even think about checking out your website.

So, you offer a 2 for 1 special ALL THE TIME - yet you say you don’t offer any specials.

What’s up with that?

 

[boatnut]

I said we never discount from our regular menu prices. Thats the price every single day. Never changes. All regular menu items. Your logic would also say that I’m discounting the pop by charging $6 for a six pack vs $7.50 .

 

[Wizzle_Wassell]

Gpizza92:

All valid points. My only argument would be will that same customer now buy from you without that special? As I posted before, 8 of 10 will still order even there is no special, so that arguments holds no water. Tell you what in June I’ll run a phone special. I’ll even start a new thread where I’ll lay out my ideas and get some of yours and after a month I’ll report back with my findings.

I always run some form of special so yeah they’ll order. As I say my specials are all constructed to get larger orders. As you say 8 out of 10 order, but you’re missing the point that if you construct offers you can improve your bottom line.