One of the highlights of every International Pizza Expo is the open discussion filled with helpful insights, off-the-wall talk and plenty of beer. We call it Beer & Bull. Others call it an educational party. Here, we kick things off prior to the 2013 Expo with a print edition of Beer & Bull.
Meet the Players:
What is the most effective promotion you ran in the last year?
Ferriman: The most effective promotion we ran last year was a bundle promotion of buying one large Signature Pizza and getting a large cheese for $5.
McConn: Our most popular promotion in 2012 was also our most popular in 2011 and 2010 and 2009, etc. I’m referring to our Munchie Madness special (10-inch one topping pizza, breadsticks w/sauce, 2 home-made brownies, and a 2 liter of Pepsi product for $10.95) that’s good 24/7. It offers strong value, fulfills a need in the sales lineup, is very memorably named and is prepared and processed very easily. We have a few others that offer similar value that are aimed at different facets of our customer base.
Krueger: We ran a super successful pizza school series, inspired by Tony Gemignani’s International School of Pizza, which our Director of Kitchen Operations, Michael Rutledge, attended. We asked ourselves how could we leverage that higher learning that Mike had received as it pertained to our guest experience? We recognized that we had an opportunity to better educate our customers on the quality of products we source and the pride we take in the preparation and baking of our pizzas. We figured, why not give our guests the opportunity to go through Pizza School? The idea was to keep it fun and simple at the same time — informative and hands-on. So we came up with three courses: 101 was all about dough … making, rolling, storing and opening the dough. 202 was all about toppings and really getting people to think outside of the box when it came to sauces and ingredients, with an emphasis on quality. 303, or the capstone as it became known, was a competition where the customers would make and present their own pie to a panel of judges that we compiled. The best pie was chosen to be featured on the cover of our menu for the following quarter, and the proceeds from the sale of the pizza were donated to the Washington Restaurant Association Education Foundation in the form of a scholarship for an inspiring young culinary student. Essentially, what this campaign did for us was drive traffic on slow nights in our stores … Secondly, it gave people an experience in our stores that they would most certainly share with their friends via positive word of mouth. It also gave us a bunch of stuff to talk about through our social media channels. Most importantly, though, the winning pizza raised money for a charitable cause which really helped us showcase our commitment to neighborhood nourishment at Farrelli’s.
Shepherd: I am not a fan of gauging success on single promotions. Rather, I like to build out a solid marketing strategy that relies on many small items all working together. But, if I have to choose just one I would go with our Upselling Incentive program for our phone staff and servers. Over the course of a month we were able to increase our check average by over $3! Employees were given incentives such as cash, gift cards, and free food to help them encourage customers to try new pizzas, specialty drinks, appetizers, and desserts. The suggestive selling was backed up by management who would parade eye-appealing food through the dining room, give out free samples, and keep the staff motivated.
Q: What is the most pressing issue facing your business in 2013?
Ferriman: The most pressing issue facing our business in 2013 is keeping our food costs down. Continuous training for proper portion control will help us in this rising commodity world we live in.
McConn: Rising costs. Given the global nature of food, if a gnat farts in Australia, flour rises 2 percent in Chicago, or so it seems. Seriously, we are at the mercy of global harvests and availability of natural resources. When there is a failure in some part of this chain, we all have to pay the price. Given the wild fluctuations of weather and changing weather patterns that we’ve seen in the past few years, I think we all need to be prepared for shortages and the consequent rise in prices.
Goldberg: Our most pressing issue is finding great locations for new stores — a good problem to have. We find that we are competing with major national QSR chains for retail space.
Q:How often do you re-evaluate your menu offerings and pricing?
Goldberg: We evaluate our menu options and pricing twice a year. We’ll add menu items when it’s appropriate, such as our January 2013 launch of the Fresh Brothers skinny crust. New menu items tend to refocus customers’ attention onto the food, and away from price changes. Ultimately, our focus is on our food. Always.
Krueger: We re-evaluate our menu selection and pricing every 3-6 months. We go through a menu engineering process to determine our Stars, Dogs, Puzzles and Plow Horsers so that we can figure out what needs to stay on our menu or come off, or which items need to be put in a better location on the menu or have the recipe or presentation re-tooled to be more effective. We want our menus to always be current and fresh and to do the very best job possible at driving profit to the bottom line. We research the gaze patterns that the human brain will make when staring at different menu layouts so that we can have our most profitable items placed in the sweet spots of the pages.
Gold: We re-evaluate our menu and pricing every three months. We only print 3 months of menus at a time.
Ferriman: We re-evaluate our menu offerings and pricing twice a year when we reprint our menus. We evaluate what pizzas sell and don’t sell, their contribution margin and their ingredient prep time and cost. Pizzas that don’t meet the standard for these factors either get a price increase or face elimination from the menu.
Q:How often do you re-evaluate your menu offerings and pricing?
McConn: Ideally we review menu and prices once a year and make changes to coincide with the start of the university school year. You can go bananas poring over POS data and trying to tweak your menu every week or month. To us it makes more sense to be patient with your new offerings and give them a chance to develop “legs”. Price increases that occur outside of normal seasonal fluctuations are evaluated to determine if they are fleeting or the new norm. Being an independent, we can literally react within minutes to a situation such as an outstanding new product or price consideration.
Shepherd: I generally review my food costs on a monthly basis. Considering the precarious economy, I am very reluctant to raise prices unless I really must. Instead I have been focusing on adding new offerings that are by nature low in food cost to help offset the rising costs in other areas.
My menu is ever changing. I try to update and refresh my menu at least quarterly. Customers want solid consistent offerings, but also want new things that they can get excited about.
Q: What advice would you give new operators who are entering the industry?
McConn: Whenever I read answers to this question, I’m always disappointed by the nebulous, redundant nature of the responses. The reality is that you need money, and of course a passion/interest, and then more money, and experience, and if you don’t have experience then a lot, lot more money. A good location helps, but nothing substitutes for financial depth. Yeah, you can make it without financial wherewithal, but you can also put your money in a pile in the middle of the street and hope it’s there the next day. Nothing, including sweat, intelligence, industry, effort, 80 hours a week, free advice, expensive advice, your wife’s family, your second cousin’s blessing, Aunt Thelma’s secret recipe that came over on the Mayflower, etc., substitutes for having ample cash. That’s just how the game is played. If you can’t play by these rules, then you really shouldn’t play.
Shepherd: You must know your numbers! Know how much profit your location can make, know how much in sales you need to make, know your break even numbers, and know when to call it quits.
Gold: Be realistic on the amount of return on your effort and investment. Be truthful to yourself why you are getting into the pizza business.
Ferriman: My advice for new operators is to first make sure your “Will Power” tank is full, and then become obsessed with learning everything about operational efficiencies, portion control, quality ingredients, customer service and how you put all those together to create success.
Q: How has social media impacted your marketing?
Gold: The return on investment is better than any other type of paid advertising out there now.
Ferriman: Social media has given us a much broader reach for a fraction of the cost. We are constantly creating new pies to sell by the slice and social media is a perfect medium to get the message out about something new and innovative we are doing. I will create say a Filet Mignon pizza and take a picture of it, tweet and Facebook it out and say….“Come in now for a new Filet Mignon slice…and just for trying the new creation I will buy your fountain soda.” Social media also allows us to interact more easily with our customers, i.e. people always put pics of pizzas on Twitter, which I see, and I subsequently direct message with a “thank you” and bogo coupon.
McConn: Social media? What’s that? Although we have a Facebook account, a Twitter account, and advertise on Yelp, we also have a yellow page ad, daily placement in our daily newspaper, and table tents. We really don’t use social media to any great extent. Why? Because we don’t have to! For all the benefits that are purported to be gained from social media, they don’t come free. To be truly effective, you or your designee need to be fairly active in pursuing the different electronic avenues, and creatively developing ad copy for them. This is spelled “time and money”. Our disdain for this venue is also based on our market position. We are acknowledged as the best pizza in 43 states (okay, we’ll settle for Bloomington for now). We have created a system of marketing that has been tested through the years to be exceptionally effective for us. Business is still increasing on an annual basis. If I was starting my first store, I would be highly involved in social media. Since Mother Bear’s has been here for 40 years, we play the game differently.
Goldberg: We consider it a valuable tool alongside traditional marketing tools like print advertising, billboards and radio. Social media is like adding another distribution channel. It allows us to interact directly with our customers, so we’re more engaged and present to our customers, which is very important to us.
Krueger: The thing I often think about is, ‘What would life be like without social media?’ I can hardly remember a time when we weren’t interacting with our friends, family and favorite organizations through various online social networking sites. For us at Farrelli’s, we were early adopters of social media, having a MySpace page for our company early on and since transitioning our efforts to Facebook, Twitter, Instagram, YouTube & Yelp to name the primary ones. These sites have helped our business to have a stronger brand presence and to engage with existing and potential guests through mediums that they are already using … Additionally, we are hearing about areas of opportunity for us to improve through these sites as opposed to not hearing that feedback at all. It also gives us an opportunity to fix any issues that someone may have encountered in our store to help retain them as a valued guest, sometimes even while they are still in the store, so that we can correct the issue before they ever leave. Our objective with social media is not to utilize it as a “free” advertising medium, as some people might be inclined to do, but rather to stay engaged with our guests so that the next time they think pizza, they think Farrelli’s … It’s about top of mind awareness.
Shepherd: Social media now makes up the majority of my marketing. I don’t push coupons and specials through social media, but rather use it as a platform to get my customers talking about us. It is instant, free, and makes the customer feel a part of something. We recently started a campaign at one of my stores focusing on getting my customers to know my staff. We take photos of the staff, post on Facebook and the first customer to come in and say the correct phrase to that employee wins a free pizza. Next month we will encourage our customers to “steal” a certain branded item, take a photo of themselves with it at a notable landmark, post it to our Facebook page and then pass it on. I hope I can get the item across the country.
JOIN US:Beer & Bull Idea Exchange® Tuesday and Wednesday, March 19 & 20 4:30 – 6 p.m.
Have you ever wondered what it’d be like to sit at a table with 10 other pizza operators from all over the country—or in a room with 500 colleagues—free to discuss whatever issues are foremost on your mind? It happens every Pizza Expo at Beer & Bull, where attendees wind down from the day with a cold drink and friendly information sharing in a non-competitive environment. You name the topics; you ask the questions—at your table and over the microphone in the larger room. Pizza Today publisher Pete Lachapelle moderates the discussion to ensure that someone will have the answer you seek.