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Texas-based Pizza Patrón closed 20 of its stores last year, yet the company now pays for an employee incentive program and is going against the tide of its competitors with a different marketing approach.
And according to Brand Director Andrew Gamm, the company is seeing positive results.
Total sales and comp sales have steadily risen, Gamm said. Pizza Patron's success could be due to its unconventional marketing efforts and its attempts to reward employees' hard work.
Among those marketing strategies, the company made the decision to accept pesos as a form of payment at some of their locations.
PizzaMarketplace.com spoke to Gamm about the brand's progress in the past year, why it decided to change marketing plans, and what the employee incentive program has to offer.
PIzzaMarketplace.com: What was the impetus for your company deciding to takes pesos?
Andrew Gamm: The insight behind this campaign was something we understood about our core customers' traveling habits. A couple of times a year, especially during the Christmas season, many of our customers traveled back home to Mexico to visit family and friends. We knew that they often came back with a few pesos that were just set aside until their next trip back to Mexico. We decided that we could "activate" that money here in the U.S. providing a legitimate service to our customer and selling a few more pizzas in the process.
PIzzaMarketplace.com: Why/how did Pizza Patrón decide to market in the Spanish language?
Andrew Gamm: At Pizza Patrón, we have very limited resources so we are very focused in our marketing in order to get the most bang for our buck. Our target consumer prefers to speak Spanish so our radio and TV advertising is concentrated on Spanish-language networks.
PIzzaMarketplace.com: Why did the company decide to drift from Hispanic to emphasize Mexican in its marketing program?
Andrew Gamm: When we began franchising Pizza Patrón in 2003, our vision was to become the premier "Latino" pizza chain. In 2013, after 10 years of franchising, we decided to reevaluate our business from every angle. One of the things we discovered was that we had been making all of our brand-based decisions from a Mexican perspective for years. This happened very organically with us because the majority of our customers are Mexican, and we are always looking for ways to strengthen our connection with our target customer. It just made sense to us to call it like it is and say we are a Mexican brand, not a Hispanic brand.
PIzzaMarketplace.com: Does the company employ a Hispanic marketing person and if so, how does he or she tap into the various Hispanic or Mexican cultures?
Andrew Gamm: The company's marketing manager, Edgar Padilla, was born in Mexico and now is a permanent resident of the U.S. Edgar is Mexican, but he is also very Americanized. He brings this unique perspective and understanding to work every day. Our company also employees hundreds of Mexicans that include all of the different levels of acculturation. We have access to a tremendous well of cultural knowledge, insight and experience within our own company.
PIzzaMarketplace.com: The company recently started an employee incentive program. What was the reason or impetus behind this?
Andrew Gamm: We launched our MERO MERO (best of the best) employee incentive program at the beginning of 2014. We want to create a culture inside our company that says "if you work hard, you will get noticed." We want our team members to know that there are career opportunities available that can take them from making dough in the kitchen, to running their very own restaurant. Motivated and happy employees always lead to better customer experiences and ultimately more sales.
PIzzaMarketplace.com: What does the program consist of/how does it work?
Andrew Gamm: The MERO MERO program uses very simple sales metrics as a basis for determining the winning team each month. The store with the highest increase in "pie average" over the previous month wins. We take the total sales for each store and divide it by the number of pizzas they sold to get the "pie average." This is a simple way to measure who is selling the most pizza upgrades and side items.
PIzzaMarketplace.com: What is the cost of the incentive program for the company?
Andrew Gamm: Pizza Patrón's MERO MERO incentive program costs about $1500 per month.
PIzzaMarketplace.com: What is the objective of the incentive program?
Andrew Gamm: The objective of the program is simple: to increase sales and improve the customer service experience in our stores.
PIzzaMarketplace.com: What benefits do employees and the company experience from the incentive program?
Andrew Gamm: Each employee on the winning team gets a $100 WalMart gift card (the manager gets $200), a custom embroidered MERO MERO cap and uniform shirt. The uniform shirt identifies them as a member of the top team in the U.S. creating a real sense of pride in their achievement.
PIzzaMarketplace.com: Why was it important to have this incentive program?
Andrew Gamm: It is important to have this incentive program because it helps all of the team members understand that they are part of something much bigger than their own store. It also creates a communication pipeline between different stores and markets as they get competitive with each other. Another benefit is that it allows our corporate team to network directly with the winning team members in their store when they deliver the prizes in person.
PIzzaMarketplace.com: Who created the incentive program?
Andrew Gamm: Our marketing team worked closely with our operations team to develop the program.
PIzzaMarketplace.com: Pizza Patrón recently closed 20 of its stores. Was the incentive program in any way a response to that? If so, how?
Andrew Gamm: The incentive program was not developed as a result of the store closings. It actually shared a place on the same list as the closings did. It is all part of a deliberate and strategic plan to reshape the culture of the company.
PIzzaMarketplace.com: What was the reason for 20 stores closing? Was it due to underperformance, and if so, why was it underperforming?
Andrew Gamm: In 2012, the company was approaching the milestone of 10 years of franchising. We were facing our first franchise agreement renewals and decided it was a perfect time to take a hard look in the mirror to determine what the next 10 years were going to look like. The stores we closed were all underperforming and in many cases operated by disengaged owners. Many of the stores were also what we considered to be "outliers," single outlets in remote markets. These were the result of unfulfilled development agreements. When we looked at the condition of our business, we knew that we would be much healthier if we could eliminate the substandard stores from the system. The result of our strategy to close has exceeded our expectations with total sales up 6% and comp sales up nearly 12% for the first half of 2014.
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