Pizza customers are a promiscuous bunch. Let's look at the top 10 pizza marketing strategies you're not using – but should be – to make sure your customers continue coming back.
Pizza marketing is a unique animal. There's no other business that accepts customer orders in-store, via phone, and online. Options for pizza have exploded, from crusts to styles, ingredients, and oven temperatures. Passionate customers carry enormous weight – just think of the sheer amount of "Where should we get pizza from?" conversations taking place every day – but getting customers to this level of loyalty takes time, energy, and flawless execution.
To succeed, pizza marketers need a strategy that's outside the box. Here are the top 10 pizza marketing strategies you're not using that lead to increased revenue and drastically improved customer satisfaction.
1) Tailor Your Marketing Strategy To Millennials
According to PMQ, last year Millennials made more than 14 billion visits to restaurants and spent $95 billion (for comparison, total 2014 pizza sales were $38.5 Billion). Millennials have gone from fiery upstarts to the focal point of our economy – they make up the largest population cohort the U.S. has ever seen, they hold $200 billion in spending power, and Barrons estimates that millennials could soon generate GDP growth of 3% or more – at least a percentage point higher than the current levels.
As a result, pizza marketers need to tailor their strategy to this demographic. That's the only way to find success. Fortunately, there are two straight-forward ways to appeal to millennials:
A) Make mobile the focal point of customer communication; email (and whatever else) should be complementary
According to eMarketer, 90% of U.S. millennial smartphone users have their phones within arm's reach 24/7. So, hopefully clear: mobile = priority #1 to communicate with the economy's most important (i.e. lucrative) demographic.
What's also interesting – what's happening to email marketing: Epsilon found that email engagement rates dropped to 4% in 2014 (down 20% from a few years ago), while MailChimp shows restaurant clickthrough rates to be just 1.7%.
1.7%. Every time an email marketing campaign needs to attract 100 visitors, a pizza marketing team needs 10,000 customers on an email list. Contrast that with the 80% engagement rates created by mobile marketing – pizza marketers only need 125 customers to see 100 visits. What's more achievable – finding 10,000 customers or 125?
Millennials choose (and prefer) mobile as their primary means of communication. Those pizza brands that rely solely on email marketing will not be able to keep up (to be clear, email still has value – it just has to be the George to mobile as Seinfeld).
B) Get Rid Of Plastic / Punch Cards
A recent case study from a San Francisco-based restaurant that targets millennials revealed that, after spending $10K+ on printing plastic loyalty cards, 74% remained unregistered, 44% unused, and only 18% of customers still used their card three months after receipt. After switching to a mobile-based program, 83% of customers remained active three months after signing up.
That jump represents a 461% improvement in marketing to millennial customers.
Just like mobile vs. email, there shouldn't really be a need for a detailed explanation, plastic / punch cards don't work for the millennial audience. Focus on mobile and see better results.
2) Increase Sales Per Unit Using NPS and Retention Marketing
From the aforementioned PMQ article, most populated areas have as many pizza restaurants as they can support. Nationally, 1.2K pizza units shut their doors in 2014 while 2013 saw the closure of 2K stores. Pizza restaurants need ways to increase sales-per-unit – in addition to opening new stores – to continue growing revenue.
As such, here are two proven strategies to increase same-store sales not in use by the majority of pizza brands:
A) Track Customer Satisfaction To Identify Revenue-Generating Best Practices
A recent study of multi-location restaurants found that the average transaction at a business's best-performing location is 93% higher than its worst. By bringing low-performers up to the level of high-performers, pizza brands can eliminate this discrepancy and immediately increase sales-per-unit.
To do so, use Net Promoter Score (or other customer satisfaction metric) to track overall customer satisfaction. Implement high-performing locations' best practices at locations that aren't doing as well. This will steadily increase sales to a level where all locations generate a comparable revenue per customer and total revenue.
Then, use NPS to track new customer service initiatives designed to increase sales and promote the best initiatives across the entire brand. As a starting point, consider employee training about how to articulate the pizza brand's value proposition. Customer retention rates are 18% higher on average when employees are highly engaged.
B) Increase Average Spend Per Customer Using Easy-To-Redeem Customer Rewards
When confronted with the challenge of increasing revenue, every business in the world thinks the same thing: we need more customers. However, here at the Top 10 Pizza Marketing Strategies You're Not Using, we're trying to uncover something you don't already know.
So, focus on your existing customers as a source of new revenue. A rewards program – smartly designed – increases revenue in and of itself. From there, set up a referral program to get new customers by way of your existing ones. Incentivize existing customers to come at different times during the week. Remember, revenue is revenue, no matter the source. Spend resources on the initiatives that will add the most revenue, not the most customers.
3) Create Transparent Customer Communication
According to data from a recently-released restaurant study about consumer participation in restaurant marketing initiatives, 48% of consumers never sign up simply because they lack information. When consumers are informed, 87% chose to enroll.
So, when pizza restaurants communicate clearly about a program that benefits their customers, they can generate an 80% improvement in the number of customers that choose to participate (interestingly, this best practice applies to other industries: Michael Marino, VP of Customer Loyalty at Caesars mentioned that conversion rate for loyalty cards jumped from 24% to 80% once the marketing team "made a conscious effort to be very clear with our intentions").
To create transparency, A/B test existing communication to verify that it's effective. From there, tie communication to customer activity rather than random events (e.g. trigger a mobile notifications right after a transaction rather than the next day).
4) Do NOT Launch A Daily Deals Promotion Unless You Have A Retention Marketing Strategy In Place
A recent survey posted to Pizza Marketplace found that nearly 80% of survey respondents think online deal sites, such as LivingSocial, are successful in driving sales; 18 percent stated that online deal sites are more beneficial than other marketing channels (yes, LivingSocial sponsored the survey).
To be very clear, it's a terrible idea to launch an online/daily deal promotion without a strategy to make sure customers come back. Please read this blog post for the Microsoft Excel analysis, but it's impossible (yes, impossible) to earn a positive ROI on an online/daily deal unless the majority of customers come back – and that's before we even get to the Yelp effect.
To make sure customers return, remember best practice #1 – having an email address doesn't count. Seek out a mobile solution to see long-term results.
5) Make Transaction Data Part Of The Pizza Marketing Arsenal – Now
The same Pizza Marketplace survey found that 49% of respondents rate "difficulty tracking the ROI of marketing investments" as their most significant marketing challenge. Moreover, 86% of participants said "they make marketing decisions without any supporting data."
One of my most intelligent friends told me once, "don't ever borrow money unless you know it's going to make you more money." No brainer, but let's put it bluntly for the pizza world: "don't spend money on marketing unless you know it's going to make your more money."
To actually "know", you need transaction data. It's as simple as that. There's no other way to track the success of marketing intiatives. A coupon without transaction data does nothing for a pizza business. It's equivalent to standing on a soapbox, wearing a blindfold and earplugs, and yelling at people – imploring them to drop some money in a hat.
To establish transaction data as an asset at your pizza restaurant, ask every single marketing service provider / employee at your business: "How will this initiative affect customer recency, frequency, and lifetime value, and how will we measure this effect (h/t Dunnhumby)?" The only way to answer these questions is via transaction data.
6) Do NOT Invest In Shiny Objects – Implement Technology To Create Useful Customer Experiences
In a recent PMQ report, one pizza operator suggests a tipping point for launching a mobile app: "If you have three or more locations—then, yes, jump on it [a mobile app] right away. You might not get a tremendous amount of use out of it right away, but having one early will reap rewards down the pike.”
With all due respect, this is – straight up – bad advice.
Here's why: app vendors want pizza operators to believe that having an app on someone's home screen generates awareness – flawed when you consider that only 25% of apps are used regularly, building an app costs thousands of dollars just to get started, and overall app usage is up – but branded app usage is not. Yes, the average smartphone owner downloads 26 apps, but the average smartphone owner also only uses six of them daily (all 6 of which have to do with messaging, social media, or transportation).
Worse, an app that's never downloaded and sits in the app store with poor customer ratings does severe damage to your brand. Essentially, you're hanging a sign that says "People don't like my brand," for any smartphone owner to stumble across. Plain and simple, waiting for an app to pay off, rather than making sure an app pays off, will not work – ever.
What we have is a classic example of "shiny object syndrome" – one of the most dangerous pitfalls of running a pizza business. The correct tipping point for spending money on an app is: "When the amount of money you spend on an app will produce more revenue than any other marketing investment."
Here's another classic example of shiny object syndrome: "People ages 55 to 64 send and receive an average of 80 texts per month, and senior citizens (65-plus) average 32 texts per month. Text messaging is the most effective way to reach everyone, regardless of age, race or income level.”
Well, sure, senior citizens text their grandchildren and friends. But, how many senior citizens text with businesses (much less pizza places)? A miniscule amount. Those that do – without question – sign up because they see enormous value in the texting programs – not because they like texting with pizza places.
Here's the best way to evaluate investment in an app, SMS, and technology in general, straight from reknowned pizza operator Chef Bruno: "Good customer service is the best marketing strategy. Treat people right, make them feel at home. Give them a glass of wine while they’re waiting. Don’t curse at them. Tell them how great they look, how beautiful they are. Make them your friend. Don’t forget their names. This is the best marketing."
I.E. – Don't build an app just because you have three locations. Build an app when you know it's going to produce massive improvements in your customers' experience. Don't build an SMS platform because that's a way to reach customers. Build an SMS platform because that's a way to reach YOUR customers. New age technologies are ideal for rewarding customers for visiting more often, delivering VIPs a custom experience, or providing a platform for customers to share their feedback. If your app can deliver on these initiatives (and the vendor building the app has demonstrated success), awesome. Invest.
If you're unsure, remember this rule: focus on customers first when considering new investments in technology. Be on the lookout for – and avoid – shiny objects. That's the path to success.
7) Reward Your Best Customers – Not Your Worst
According to a January 2015 study from the CMO council, "44% of consumers would like brands to deliver deals and coupons to their mobile devices."
OK, so mobile coupons make sense, right?
Well, maybe. First things first: who are these "44% of consumers?" Are "they" loyal customers who will visit your pizza place often? Or are "they" deal hunters who will cut into margins and never come back?
As pizza marketers, we have to know. Too many times, pizza brands launch coupon campaigns excited to see more customers – but then wonder what happened after an initial bump in sales. Do not fall into this trap.
Instead of incentivizing/rewarding customers blindly, implement a VIP program targeted at the top 5%25% of customers. In case you missed it, the top 25% of customers represent 2/3rds of a multi-location restaurant's revenue and the top 50% of customers represent more than 80% of total revenue. Given their enormous revenue potential, rewards, incentives, and benefits should go to the best customers to ensure that they solidify their commitment to your brand.
Said differently (and maybe more clearly), develop marketing programs that reward good behavior. Eliminate programs that reward bad behavior (like blanketing the market with coupons) – bad behavior will never be able to deliver long-term benefits for your pizza restaurant.
8) Use Existing Customers To Smooth Out Variability
According to a LivingSocial survey, restaurants identified the months of January, February, July and August as slow months for business. Another Time Magazine-sponsored survey saw the post-Thanksiving holiday period as the toughest for multi-location restaurants.
Look, every business has slow periods. Of course. What's curious: most businesses think that they can find brand new customers to fill in those slow-period gaps. I get the logic in a vacuum – "Hey, we don't have customers filling our pizza joint in December. Let's just find new people to come during this time" – but it's equivalent to looking at a campfire that's not burning and just buying more logs to put on top. We've all found out that the only way to get the campfire really going is to rearrange the existing embers so that adding more logs is actually productive.
Plus, a pizza restaurant is not a campfire. It's a restaurant! And new customers don't look at an empty restaurant and think, "Oh nice! I'm going to try this empty place out" – instead, they do the exact opposite.
You know who does go into a restaurant that's empty? Existing customers who love the food, atmosphere, and want more chances to experience what they love (especially if it means waiting less time to receive their favorite pizza).
So, use your existing customers to fill up your pizza restaurant during slow periods. You'll find that this strategy yields massive increases in overall revenue. Plus, as a previously slow periods become busy, those brand new customers will see the increased activity and want to check out what's going on. That's how the pizza business works.
9) Collect Customer Feedback That's Tied To Actual Customers
If you want get a rise out of a crowd at a pizza industry event, just mention "Yelp" and see what happens.
Yelp tends to be frustrating because people can submit reviews that potential customers can read, but nobody (neither customers nor pizza place owners) has any idea who these reviewers actually are or how much stock to put into their opinions. Yelp reviewers might be your best customers: people who have spent thousands of dollars in the last month. More likely – they're people who have only visited once and based their review off of a single interaction.
Here's what Yelp's executives say in response to such critiques: "Consumers have the right to talk about what they like (and don’t like) about a meal they ate, a plumber they hired or a car wash they visited. We don’t remove business listings, so a business’ best bet is to engage with its fans and critics alike through the free tools Yelp provides."
Translation: the customers creating Yelp reviews are Yelp customers. Because Yelp has a large consumer audience, you need to interact with Yelp customers via Yelp's tools.
Here's Yelp's official policy: "We use automated software developed by our engineers to recommend reviews from the Yelp community. The software looks at dozens of different signals, including various measures of quality, reliability, and activity on Yelp. Most of all, however, it’s looking for people who are intrinsically motivated to share the wide range of rich and detailed experiences they have every day with local businesses."
Translation: Yelp reviews come from the most promiscous customers; innately Yelp's reviews come from customers more likely to go to more places.
Whoa. That's a tough bind to be in as a pizza operator: use Yelp tools to respond to Yelp customers. Have the future of your business be decided by promiscuous, non-expert consumers who visit as many businesses as possible. Moreover, in markets where Yelp does have significant traction, Yelp has a point. Pizza shops should respond to Yelpers' reviews.
OK, but is there anything else a pizza operator can do to get more value out of customer feedback? Fortunately, yes!
Tie reviews to specific customers and respond to feedback before those customers write anything on Yelp. Here's how it works – right after customers complete a transaction, send a mobile survey at random asking customers to rate their experience. If customers do give feedback, respond! Because you know exactly which customers (spending an exact amount of money over an exact period of time) reviewed your business, responding becomes much more productive.
When you do respond, urge customers who had a good experience to come back soon - or, if you want, post their feedback to Yelp. For negative reviews, address the issue at hand in a respectful manner. Doing so will prevent negative reviews from hitting Yelp – and oftentimes transform bad experiences into positive reviews. That's how feedback should work– a two-way, transparent street.
10) Automate campaign analysis wherever possible, otherwise you'll drown in too much data
Here's a phenomenal quote about running a pizza business from Sean Brauser, the founder and CEO of Romeo’s Pizza: "To expand your company, you must have a system in place that allows your employees to run the system while the system runs the business."
I'd like to add one more sentence: "To expand your company, you must have a data analysis system in place that allows your data to run the system while the system runs the business."
Here's why – for multi-location pizza operators, "packed schedule" is the world's biggest understatement. Having to carve out time to run comprehensive data analyses isn't possible.
You know what is possible? Doing data analysis once, and then letting that analysis do the work from there on out. For example, a Winback campaign:
Analyze your customer data to identify when customers seem to be at risk of leaving your business (if you need a starting point, try "any previously active customer who hasn't returned in 4 months").
Determine the appropriate incentive to deliver to these customers to encourage them to come back
Trigger a notification that customers receive when they reach the "Winback" criteria
Track redemptions to determine ROI
Approaching marketing in this automated way results in an ROI of 125% after 1 month, 500% after 2 months, and 800% after 3 months. Why? You've created a system that can run itself, rather than having to carve out non-existent time to crunch more numbers every day. When possible, delegate to computers, just as you delegate to employees. That's how you can add more locations and continue seeing succcess.
To close out our top 10, let's look at one more quote from Mr. Brauser:
"Your job as a multi-unit owner is to grow your brand, identify new sales opportunities, and constantly improve the systems you have created. This is truly the path to multiunit success."
The Top 10 Pizza Marketing Strategies try embody this philosophy: they provide new sales opportunities and additional pathways to improve the systems you have created. Any questions, let us know, and for more info check out pizzaloyaltyprogram.com.
Article by: Kane Russell — Marketing at Thanx by Kane Russell — Marketing at Thanx
Shared by: Boston Restaurant Brokers 128 Cambridge Street, Boston, MA. 02129
www.bostonrestaurantbrokers.com Boston Business Brokers
Note: If you have a pizza shop for sale in massachusetts, we have buyers looking to buy immediately. call us 617-285-7875