- WHITE PAPERS
Mis-math or funny formulae?
Not surprisingly, I touched a nerve with my recent commentary, "It's time to boost pizza driver reimbursements — once and for all." For those who haven't read it (and how you could deny yourself the experience, I don't know!), the piece centered on my belief that pizza operations should pay the Internal Revenue Service's minimum mileage reimbursement of 40.5 cents
Steve Coomes, Senior Editor
Some who wrote rebuttals poked holes in the one-order-per-run mathematical formula I used to justify my claim by saying they rarely send drivers out with less than two orders per run. (Remember, part of why I'm a journalist, is because I hate math! But that's beside the point.) Fair point and well taken. But it doesn't resolve other costs to the driver, such as depreciation and overall usage.
One former operator simply told me "your math is a bunch of hooey," but he never offered his own math.
Another thought I was applying new car depreciation figures onto old cars, but I wasn't. I used the Kelly Blue Book value based on my wife's 4-year-old econobox.
Bottom line, since there are so many variables, all our formulae may need some tweaking.
Though I promise to rerun some figures using those and others' suggestions, overall, no one has convinced me that most drivers are fully compensated for the use of their vehicles. As always, however, I'm open to other opinions.
Meantime, I maintain my stance: Pay drivers the IRS minimum for the miles they cover, not for the orders they deliver. The car doesn't wear out based on how much pizza is in the passenger seat, but it does wear out based on the miles racked up.
Brandon — real guy, regular hair — to help "The Donald"
Domino's Pizza gets one more mega-exposure opportunity when chief executive and chairman David Brandon appears on the May 5 episode of "The Apprentice." This is a follow up to Domino's March 31 "product integration" episode, when the show's candidates were tasked to operate a Domino's mobile pizza unit in New York City.
For those who've never seen Brandon speak publicly or had the pleasure of meeting him, I can speak from personal experience that he's an infinitely more "regular guy" than Donald "My Ego Is Bigger Than My Debt Load" Trump, the hit show's star. Brandon's not only smart and articulate, he's got completely normal hair, unlike Trump, whose comb-over, rumor has it, is being considered for the eighth wonder of the world.
In this episode, Brandon will interview the handful of remaining apprentice candidates and report his findings to Trump for further review. Perhaps luckily for these contestants, Brandon's part was taped last fall, months before he watched the March 31 episode where the 10 remaining candidates trashed the Domino's pizza kitchens in which they worked.
3Cheese Stuffed Crust rollout no accident
Note to smaller operators: If you haven't watched Pizza Hut closely before, now is a good time to launch a long-term study of an industry master.
The pizza giant's rollout of its new 3Cheese Stuffed Crust pizza was brilliantly timed. Be it serendipitous or shrewd (my money is on the latter), the new cheese-laden pizza got its coming out party right when cheese prices fell into the $1.45 range. Somehow I don't see that as an accident.
But perhaps more importantly is to take note of how well Pizza Hut executes this new limited-time offer (known in some circles as an LTO.) Watch the following closely:
* The 3Cheese was launched officially on April 25, so note how long the product remains available. If it goes away quickly — which I seriously doubt it will — that's a sign it bombed (and when was the last time that happened to Pizza Hut?) If it lingers on for several months and its introductory price isn't reduced, it's likely a success.
* Without notice, the 3Cheese could vanish from stores. Why is this beneficial to anyone? Because one of the beauties of an LTO is that it allows the operator to create scarcity by removing the product at will. Just about the time customers get used to ordering it, it's gone, leaving customers pining for a possible return.
That absence also gives customers a chance to say, "Hey, where did that go?" which, in a very unscientific way, lets operators "survey" customer desires. In other words, if it goes away, but nobody asks about it, it probably was a loser.
* From a profit-loss position, a well-run LTO gives an operator the chance to pull the product if its food costs become unprofitable. If cheese prices spike unexpectedly, you might see the 3Cheese disappear until prices go down.
* Take what you learn from the Pizza Hut example and experiment with specialty-item LTOs of your own, and particularly on slow days. (Notice I didn't say "low-ball" offers, which are common on slow days. Get creative instead.) Here's one idea: Try making every Tuesday "Fat Tuesday," and sell Cajun pizzas topped with andouille sausage or blackened chicken — and offer it only on that day. Market it however you choose, and see if sales rise.
Stories you can use ... for marketing
If pizza marketing guru Kamron Karington didn't share his opinion freely enough, you can get more of his undiluted wisdom and attitude via his new blog. Each installment blends personal anecdotes and professional advice for successful marketing strategies. Plus, they're pretty entertaining pieces, too — well maybe for everyone except his mother. Some of his stories surely make her wonder how her boy ever made it past 25. Give it a click sometime at kamronkarington.com/blog.html.