MARKETING: POS Systems are marketing machines

May 17, 2004

Here's an astonishing claim: Many POS manufacturers say 80 percent of their pizza operator customers never use their systems' marketing components.

That's like buying a Ferrari for 'round the block cruising.

Why so many operators don't maximize the sales-building potential of their high-dollar, high-performance investments typically boils down to one claim: They say don't know how to make it work, and/or that they're busy to learn how.

Kamron Karington's answer to that complaint is simple: "How long does that guy want to be in business?"

When Karington bought his first pizzeria several years ago, marketing, not ovens, coolers and cheese, was on his mind. A POS system, he knew, would help him build a database of customer purchases and mailing addresses—all of which would lay the groundwork for a highly targeted marketing program.

"Sure, I knew the POS made the order process faster and more accurate for the kitchen, but the only reason I bought the system was for marketing, period," said Karington, a marketing consultant and author of "The Black Book of Pizzeria Marketing."

Getting his customers to use his POS systems' marketing component is a constant challenge for Tom Bronson, president and CEO of Rockland Technology Group. Customers know what their DiamondTouch units will do, he said, but no matter how easy Rockland makes it for them, too few tap into that resource.

"Ours comes with a preloaded database of 30,000 to 40,000 names of potential customers living within a certain mile radius of a restaurant," Bronson said. "So they've already got some tools built in ... they could do some direct mail right away if they wanted to."

According to Jennifer Weibe, marketing manager for Speedline Solutions, stressing the profits lost is about the only way to motivate operators to convert the POS from a glorified cash register and into a marketing machine.

"I tell them that if they're not doing customer database marketing every month, they're basically throwing money out the window," she said. "It's also the fastest way to make your POS pay for itself."

So where do I start?

With the

Getting Started

If you haven't used your POS's marketing function, here are some steps for getting started.

1. Use the POS to record every customer's address.

2. After 30 to 60 days, use that mailing list to send out a post card saying, "Thanks for your business. Come back soon."

3. After 90 to 120 days, begin targeted, trackable mailings based on past purchases and check averages. Offer deals you know will appeal to each customer and his spending habits.

4. Begin tracking "lazy" customers and make more aggressive offers to entice them to return.

5. Make targeted marketing a lifelong habit. High awareness typically yields a high level of customer consciousness, but targeted marketing—i.e., giving customers what they've told you they want—yields long-term loyalty.

right POS, starting a marketing program is fairly simple, because it all centers on data acquisition. If your pizzeria is a delivery operation, your POS likely has recorded thousands of names of customers who've called for delivery. If you're not recording that information, then begin immediately.

If carryout is a bigger portion of your sales, then train your counter workers to ask customers for their addresses. Some of Bronson's customers, however, claim their patrons are reluctant to give up that information.

"I don't always like to give my address to everyone who asks, but if I know I'm going to get some coupons or some special deals, I don't mind," he said. "Gathering that data is absolutely critical, and training employees to ask for it is absolutely critical."

After three to six months, you probably have enough customers in your database to execute a general mailing—not a highly targeted promotion, but a message to many that says, "Thanks for trying us, come again soon." The goal here is to maintain your stake in the customer's mind and generate repeat product trial. A discount incentive likely will help achieve that.

At this stage, Rockland's Bronson encourages his customers to use their POS's mapping function to pinpoint sales response by neighborhood.

"You can plot those customers out to see where they're buying from," he said. "It allows you to decide whether you want to do door hangers or a broad mailing in a neighborhood that's buying from you, or in one that isn't."

At six to nine months, your database is deepening and it's time to learn more about your core customers. Speedline's Wiebe recommends having your POS system generate reports showing which customers purchased from you in the last 30, 60 and 90 days.

She then suggests operators develop at least two separate offers. Since they're likely already loyal customers, a 30-day customer's offer should be a reminder with perhaps a small discount incentive. The 60- and 90-day customers, on the other hand, may have been visiting a competitor, and should receive a more aggressive offer. Start with a message saying, "We've not seen you lately/we miss you," and then throw in a half-price offer, a two-for-one or even a freebie.

Above all, make sure all offers are "trackable," said Wiebe, meaning their success rate is can be measured.

"Make sure to train your staff to ask for the information (about an offer) always," she said. "If they're taking a phone order, it's typically a matter of pressing a button on the POS screen that lets you track that offer. If it's a voucher or coupon, make sure they collect it. From that point the POS will track the usage."

Simple, targeted mailing offers, Karington said, are dirt-cheap investments that yield high returns.

"To understand why you need to do this, you've got to understand the lifetime value of a customer," he began. "Most people order pizza at least twice a month, so if they spend $15 each time, that's $360 a year. Take that out just three years and the customer's worth $1,086 to you.

"To think you can send an offer once a month every month for 50 cents—$6 for a whole year—to retain that customer is amazing."

Measure and tweak

As customers respond to your offers, run monthly reports to show who purchased exactly what. That data will reveal detailed customer preferences and better allow you to target future offers to those desires.

Karington said he learned to target his promotions based on customers' average tickets.

"If they had an average ticket less than $13, they got an offer at $9.99 for a basic pizza," he said. "Those with ticket averages over that were probably into our gourmet offerings. So it was pointless send them the same $9.99 deal. The gourmet group doesn't really want that kind of pizza, they want something more."

If you don't have the time to get that detailed, Wiebe said, at least do a general review of which promotions were the most successful. Too many operators tell her they "just know" what sells best, but the numbers contained in the POS reports often tell a different story.

Starting up is hard to do

The initial stumbling block to getting started, Wiebe said, is committing to a POS marketing plan. Much like an out-of-shape person starting to exercise, once an operator gets his marketing program going, it becomes a routine over time.

"It's really pretty simple to do, but the thought of just doing it stops a lot of people," Wiebe said. "They think, 'I've got pizzas to make,' but they've got to find someone else to do that if they want to increase their sales."

On the other hand, if an operator isn't comfortable at the keyboard of a computer or POS terminal, he could delegate that duty to someone who is.

"Just find someone who's really good on the computer—everybody's got a high school kid on staff who's like that," said Wiebe. "Once they learn how to use those tools, keeping it running is not a huge investment of time."

But a good marketing program is a lifetime commitment, Bronson said.

"This is not something you do once and expect great results," he said. "You should establish a marketing program that's ongoing. The best marketers are consistently delivering a consistent message. With them it's a process, it's a way of life."

Topics: Marketing , POS

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