Holds Barred

Jan. 6, 2003

What's the top problem in the pizza industry today?

Freddie Wehbe says it's the telephone -- not the machine itself, but the way pizzeria workers handle it.

"I think we're rude on the phone, and we (tick) people off by putting them on hold," said Wehbe, a five-store Domino's Pizza franchisee in Gainesville, Fla.

But even Wehbe, whose stores are among the busiest in the Domino's organization, admits that's unavoidable. The pace of business, especially at his store near the University of Florida, which averages better than $45,000 a week in sales, necessitates it.

"We average 20 seconds (on hold) per customer, but we'd like to get it down to 15," said Wehbe. "But I don't want to use a message machine to handle that. People have been on the phone all day, and they don't want to hear a machine."

Among Domino's operators, Wehbe figures he's one of a handful of holdouts who've not added a call management system to his phone lines. His peers tell him the machines save on labor, boost check averages and pay for themselves fairly quickly.

He's not budging, however, and said he'll continue staffing one person per line during peak periods at his campus store. That's 10 people on the phones for three straight hours on a Friday night.

"But what's that cost me? Fifty bucks?" Wehbe said. "Fine. Others can spend thousands on a machine that makes people mad."

Proponents, however, say it's a machine that makes customers buy more. Both pizzeria operators and providers of call management systems and services claim their products boost check and ticket averages by providing phone customers a marketing message before they talk to a staffer. They say that such messages not only help customers affirm their purchasing decisions, they often steer them to what the operator wants to sell.

"We found in our own studies that 42 percent of customers who hear about the special in a message will order that special," said Rick Stanbridge, co-founder of Fidelity Communications, a manufacturer of call management products in Novi, Mich.

Bob Rooyakker, a Little Caesar's franchisee of eight stores in Michigan, says his call manager simply tells customers what they want to know.

"And that's what the special is," said Rooyakker. "If they've heard what it is before they talk to someone, they usually order it."

Hold me not

Operators and call management providers believe customers don't perceive they're on hold until they actually talk to a human and then are put on hold. When that occurs, said Stanbridge, is when the tension sets in.

He cited a 1960s study conducted by Bell Labs that examined how long customers placed on hold believed they were on hold, versus the true length of time.

"Listeners put on hold estimated they'd been on hold 10 times longer than they actually were," said Stanbridge. "So if you put someone on hold for one minute when they call for pizza, to them it's like 10 minutes."

Add in "dead air," time without a message or music, said Mike Wick, owner of Message On Hold, and the customer's impatience multiplies.

"These guys get 95 percent of their business through the phones, but they don't equate their phone systems as something they have to invest in, like an oven."

Rick Stanbridge
Co-founder, Fidelity Communications

"That's when you get a hang-up," said Wick, whose business is headquartered in Houston, Texas. "And let's say that an average ticket is $12. If you lost one customer a day that way, that's more than $4,000 a year."

John Leonard, director of telecommunications for Louisville, Ky.-based Papa John's, labeled the pizza chain's hang-up tally the "abandonment rate." In an effort to lower its number of hang-ups, the company launched an eight-store trial of a call management product last September. The results from the test, he said, are conclusively positive.

"I've been excited about this since day one," said Leonard. "In my mind, the test is over. I'm convinced this is a valuable benefit to us."

Multiple messages

Unlike dated technology, such as answering machines that play a simple greeting before leaving the customer on hold, modern call management "boxes" can deliver a wide variety of messages to phone customers.

In instances where a guest hears the upfront message, talks to a staffer and is then put on hold, the on-hold message is different from the first message. It may spotlight another product, tell callers the shop is hiring, or talk up the operator's participation in charitable events.

Additionally, different messages can be programmed to play at different times of the day. That allows an operator, for example, to push salads or sandwiches at lunch, family meal deals at dinner time, and multi-pizza deals in conjunction with ball games. Even something as simple as a "we're closed" message can be scheduled to play outside of business hours.

Call management providers record each operator's customized messages at their own sound studios using professional voice talent, and then download those messages via the Internet into each store's call manager during off hours.

Like Fidelity and Message On Hold, Focuspoint, a call management service provider in Manassas, Va., can supply messages in emergency situations.

"There was a franchisee we were working with who found that his mixer was putting metal fragments into the dough for his hand-tossed pizzas," said Jim DiModica, president of Focuspoint. "He called us in a panic and told us he wanted to change his message to promote a pan pizza instead of his hand-tossed."

Within an hour, DiModica said, a message was digitally recorded and downloaded to the franchisee's 17 stores. "All he had to do was promote something else, which almost all the customers bought that day."

Mark Pectol, a 12-store Domino's franchisee in Portland, Ore., said a staff member's death necessitated an emergency "we're closed" message from his provider. Six hours later, the message was available for play in his stores.

Call management boxes also are used to manage bilingual messages, said Wick, allowing customers to select an English or Spanish message.

Upsells are swell

That a call manager repeats every message exactly as the operator wants it is what Rooyakker likes most. He said even the best employees tire of parroting upsell messages, but machines never do.

"It's consistent every time and says just what you tell it to say," said Rooyakker. "You could say that a human body is better at that, but you can't always get employees to do what you want."

If you want consistency with humans, said Wehbe, post a script.

"We've got it right there in front of them, and all they have to do is read down the list," he said. "I think it works just fine."

DiModica said his findings run counter to both operators' belief that human marketers are better. To see whether machine or man was a better upseller, Focuspoint conducted an eight-week study in six pizzerias.

The staff at half the stores were told to upsell certain side items, while the call management machines marketed the same products at the other half. To ensure the test was balanced, marketing duties (by the staff or by the machines) and the items promoted were changed at each store throughout the test.

In the end, the call management machines outperformed the humans by 31 percent.

"The staff even knew what was going on, so they were working their hardest," said DiModica.

Wick and Stanbridge said some operators have reported check average increases of $1.50 when using a call manager with a marketing message. But Stanbridge said he tries to sell new customers on a more modest increase expectation of 50 cents per check. "If they can get that much more per transaction, when the average pizza store does 2,500 to 3,000 transactions per week, think of what that can do to your profits."

Sticker shock

Exactly what a call management product and/or service costs depends on whose product the operator is buying, whether it's financed, leased, bought outright or sold as a monthly subscription.

Stanbridge said the average cost of some Fidelity systems is $4,000, but that amount can be financed for as little as $80 a month.

Focuspoint subscribers pay $100 to $200 each month, but don't buy the call manager.

"We average 20 seconds (on hold) per customer, but we'd like to get it down to 15. But I don't want to use a message machine to handle that."

Freddie Wehbe
Franchisee, Domino's Pizza

(Since Message On Hold provides only the advertising messages to users of call management systems, its role is to partner with providers of call managers. Fees for its service, therefore, are unique to each transaction.)

Stanbridge said it's not unusual to hear operators gasp at the cost of such a purchase, but he said such alarm isn't logical.

"These guys get 95 percent of their business through the phones, but they don't equate their phone systems as something they have to invest in, like an oven," he said. "It's amazing to me how they ignore that aspect when it's one of the most important parts of their businesses."

DiModica said a call management system has become one of many tools of the modern pizzeria operator's trade, not some luxury he or she should purchase after becoming profitable.

"At the very least it's a tool that can improve their company's image and their marketing instantly," he said. "It's something that can be completely customized to their operation."

Some operators, like Pectol, claim that after using call managers, they can't imagine operating without them.

"It's just like it was 15 years ago, when computers started coming in to the pizza business," Pectol said. "People in the pizza business need to chase technology, too, and this is the next big thing."

While such machines will always have their detractors, Leonard said they bridge the gap well enough to make them acceptable to both customers and operators.

"I think it's a nice combination of automation and the human touch," he said. "When the customer gets to the human, we don't want to put them on hold. These help us not to do that."

Topics: Telecommunications

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