Mapping the road to the bank

 
May 2, 2007
The first time Kamron Karington loaded his customer database into a mapping software program, he was shocked by what he saw.
 
Karington, who had purchased a Salt Lake City pizzeria in 1994, saw that many of his orders were coming from a few hot spots around the city while other areas were producing few if any orders.
 
The use of mapping software helped Karington boost sales at his pizzeria, Wasatch Pizza, from $3,000 a week to more than $30,000 a week in three years.
 
"It allowed me to save a lot of money on my marketing," Karington said. "I started funneling a lot more money to my hot areas and spending less marketing to the cold areas."
 
Karington eventually sold Wasatch Pizza, but incorporated his experience with mapping software into his pizza consulting business, Pizza Partner. Karington uses the popular mapping software Microsoft MapPoint to help his clients make the best use of their marketing budget.
 
"Most pizzeria operators are under the impression that their trade area is a 3-mile radius, but that doesn't take into account demographic shifts, natural barriers or whether there are competitors in certain areas," Karington said. "There is no point chasing those customers if they aren't there."
 
Knowing your neighbors
 
 More and more, pizzeria operators are integrating mapping software with their point-of-sale systems to glean information about their customers. Not only can mapping software show where a restaurant's customers live, parameters can be defined to show average order prices in a particular area, and marketing campaigns can be designed with that information in hand.
 
The resulting information can be used to decide what areas to target with coupons or door-hangers, and to know what type of offers to use in a particular area.
 
By combining his customer database with mapping software, Karington was able to tailor his marketing efforts to his customers' ordering habits.
 
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For example, if a customer's average ticket was less than $13, they got an offer for a basic pizza for $9.99. If their ticket average was higher, they received an offer for something more expensive.
 
Hull, Iowa-based Pizza Ranch uses customer sales and demographics analysis to market to specific guest segments, crafting targeted messages and offers to increase order size and frequency.
 
"It lets us separate facts from assumptions," said Jon Moss, Pizza Ranch brand director. "It helps us assess whether a particular new product warrants being added to the menu and lets us measure customer retention and acquisition."
 
The quickest route
 
Pierre Coutu, co-owner of Diana's Gourmet Pizzeria in Winnipeg, Manitoba, also uses Microsoft MapPoint integrated with the restaurant's POS system. Using MapPoint, Coutu's POS automatically calculates the delivery charge based on mileage and adds it to the customers' bill. 
 
"We have 50 or 60 different zones sectioned off in our delivery area," Coutu said. "We track mileage, we know what our hot zones are and we know where our dead zones are."
 
Coutu estimates that the ability to compute a delivery charge based on mileage saves Diana's about $40,000 a year in delivery costs. The system has met with surprisingly little customer resistance, he said.
 
"You get the occasional customer who complains, but I explain to them it goes to the driver to cover the cost of insurance and gasoline," he said. "Customers are welcome to come in and pick the order up if they feel it's not a fair price, but for the extra two bucks or so they usually find it's not worth the effort."
 
Coutu's system helps speed drivers' delivery times by either printing a map to the delivery address or by listing step-by-step instructions on the delivery ticket.
 
Matching customer addresses with mapping software helps avoid delivery problems by ensuring the person taking an order is entering a valid address into the system, Coutu said.
 
Mapping software also can be a valuable tool for increasing driver safety, Coutu said. Because the system flags fraudulent addresses, drivers can avoid being lured to a trouble spot looking for an address that does not exist.
 
"If someone tries to give us an address that does not exist, the computer will recognize that and flag it as an invalid address," Coutu said. "If the system says an address is invalid, the manager would need to override it," Coutu said. "The employees can't take an order for an invalid address."

Topics: Delivery , Operations Management , POS


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