- WHITE PAPERS
March 30, 2006: Passion: the right ingredient for success
In his four decades in the restaurant business, Bill Gatti has learned a thing or two about connecting with customers. When he was 13, he spent a Saturday in a booth at a fundraiser for a local boys' home in Louisville, Ky., handing out free orange drink to attendees. The purpose
Steve Coomes, Senior Editor
"He said, 'C'mon, son, put this tie on and wear this shirt and put on this paper hat.' And for the rest of the day I passed out free orange drink compliments of McDonald's. When my dad first started, he got involved in everything like that."
The Gattis bought the struggling unit from another franchisee, and they believed community marketing would attract and build a loyal customer base. Their efforts eventually turned the laggard store into one of the top-10 busiest in the McDonald's system. In 2001, McDonald's Corp. bought Gatti's stores back—a total of 40 by then—which left him looking for other restaurant investment opportunities.
He settled on Pizza Magia, a two-year-old upstart chain owned by Dan Holland, president of Papa John's Pizza from 1990 to 1995. Gatti liked Holland, his product and saw potential in Pizza Magia.
What he underestimated, however, was the impact of a lawsuit filed by Papa John's against Pizza Magia the year before. The No. 3 chain claimed Pizza Magia copied some of its products and trademarks and demanded the latter cease using them. Eventually Pizza Magia was forced to make changes that Gatti said ruined its products. (The suit ended in a sealed settlement in 2003.) "The quality was never the same, and we complained about it a lot."
Customers were less vocal. They simply stopped calling.
"I watched my stores and the company stores deteriorate, and I saw other franchisees struggling. I watched things literally implode."
Wanting to protect his investment, Gatti converted five of his own units to the Snappy Tomato Pizza brand in late 2005. The 74-store chain is based in Florence, Ky., just outside of Cincinnati and an hour from Louisville. Armed with a new brand, a second chance and what he calls "an excellent pizza," Gatti is working for market share in a market home to Papa John's and Yum! Brands, parent of Pizza Hut.
So how does he plan to turn things around?
The same way his father did. Run excellent operations, reach out and touch the community and put out the best product available.
"I used to listen to my father for the 30 years I was with McDonald's," he said. "He always said things had to be done the right way, and he would harp and harp and harp on those things."
Persistence is what he's counting on now as his troops continue the uphill battle of shaking off its history with Pizza Magia and converting customers to Snappy Tomato. Getting former patrons to forget about the past hinges on showing them what's different in the present, namely the pizza.
"When people try it, they're like, 'Oh wow, this is really good!'" he said. "We've just got to get more people to try it, and we're working hard on that."
Like his father, he and his staff are working the community. He wants the Snappy Tomato mascot—essentially a human inside an oversized, smiling tomato costume—everywhere possible. "I want them asking, 'What is that damn thing?' And then I want them to hear about us in a parade or on the radio, and then maybe they'll get a coupon in the mail and then give us a try. Because I know that when they give us a try, they're going to say, 'Holy cow! This is damn good pizza!'"
It's that kind of word-of-mouth advertising Gatti is banking on to spread the Snappy story. He's hoping people become as passionate about eating as he is selling it.
"We don't have a gazillion dollars like the big guys have to put themselves on TV," he said. "Where they can't beat us is in the determination to hit the businesses, the churches, the hotels, the schools and the neighborhoods to do what we have to do get people to try our product.
"We're not about price point or three-pizza deals at Domino's or five bucks a pizza at Little Caesars. We're not going to give our product away. If you want gut filler, go get it. Those have no taste."
And it is all about taste, Gatti said, recalling the days when McDonald's products were much better.
"I know what fresh beef looks like compared to frozen, fresh potatoes compared to frozen, fresh buns compared to frozen," he said. "And that's what I like about Snappy Tomato. It's fresh dough made every day in the store. It's fresh cheese, not frozen. We cut our own vegetables in the store, and we use Fontanini sausage. I love the sauce they have; it's outstanding. Pizza Magia used to have that, an outstanding pizza. But that all changed."
* Visit PizzaMarketplace on March 31 for a closer look at the conversion of Pizza Magia's stores to Snappy Tomato Pizza.
March 9, 2006: Grow your business with great service
Recently, I delivered the opening remarks at a workshop for pizza pros looking to start-up and/or tune-up their businesses. Much of my presentation centered on my belief that 2006 is a great time to get into the pizza business.
Why now, you ask, when the competition has never been keener, when even Pizza Hut is struggling to produce positive same-store sales and margins are razor thin?
Because I believe there exists a tremendous opportunity to differentiate your pizzeria from so many others through service rather than products, discounts or coupons.
For the past two decades, pizza companies have worked their brains out making pizza a bullet-proof, consistent product. They've succeeded to the point that pizza is so predictable customers aren't often dissatisfied because they rarely get a truly bad pizza.
But what has become nearly as predictable is bad service, and I believe customers, consciously or unconsciously, have grown to expect it.
Upon what do I base this bold assumption? On observing multiple times that most customers never appear offended when they get poor service. Maybe I expect too much, but I can take only so many slack-jawed, bovine stares from service personnel before I give up and head for home. If I want a disinterested look, I'll tell my son to clean his room.
Yet I see customers put up with glassy-eyed, "wish I were playing Xbox" expressions all the time without the slightest hint of disappointment. I see them tip well in dining rooms and say thanks to counter workers who should have, but didn't, thank them first. I've even watched them go into a side stand to retrieve their own silverware and then apologize to a server because they helped themselves.
The flipside of every problem is an opportunity, and the opportunity to deliver unusual service couldn't be greater than it is today. To be sure, delivering predictable pizza will pay the bills, but providing exceptional service will make loyal customers who will make an operator rich.
Service is a top-down initiative
When I was 15, I thought my first restaurant industry boss was way too serious. A Sicilian immigrant, he was determined to make a name for himself by being the most charming restaurateur in the city. And he was—to his customers. I never saw him lose his temper, fret or curse at the staff, but one disapproving look from him sent everyone scurrying to fix whatever problem he found. And he found many, because he was a perfectionist, but not a jerk about it. He was simply bent on superior service no matter the cost. He wasn't some insecure people pleaser who lived and died by his customers' compliments or complaints. Rather he was a confident master of the house who knew that anticipating every guest's desire would wow them and ultimately lure them to return for another fix. He was right then and he's still right today, 26 years and millions of dollars later.
Many years removed from that job, I see him as a mentor. I didn't know it at the time, but he set the bar for my service expectations for the rest of my life. No, I don't expect his royal treatment everywhere I go, but I do expect service personnel to look me in the eye, smile at me and ask, "How may I help you?" Call me obtuse, but somehow, "Can I get your order?" doesn't have the same feel.
The difference between the two phrases isn't all that marked. Both initiate the sale, which is, of course, the ultimate goal. But one says, "It's my desire to assist you," while the other says, "Let me move you through the line."
My old boss ensured that desire to help, that honor to care for a guest, permeated the service mentality in his restaurant. It's not surprising that many of the staff I worked with back then run their own successful restaurants now.
For a story I wrote recently on management bonus programs, I talked to a handful of pizzeria managers who consistently said high standards for customer service were talked about, trained on and lived out by the owners of the shops where they worked. One manager said part of why she'd been at her present post for seven years was because it was a great place to work. She didn't say it was fun to work there or that it was a party atmosphere, she simply said the owners made it enjoyable to work there. And the fact that she said the pizzeria was always busy made me believe customers think it's also a great place to eat.
Break the mold
I've heard delivery drivers talk about boosting their tips by making a kind remark about the residence to which they're delivering. "Nice yard," or "Cool car," or "Beautiful garden you have," not only strokes the customer's ego, it shows the driver is paying attention to someone other than himself.
Same thing for counter workers and servers: Take Dale Carnegie's advice on finding at least one thing nice to say about every person you engage in conversation. It lifts their spirits and makes them feel important—if only to you at that moment.
I've read about drivers who keep a stash of dog biscuits handy to toss to customer's canines—both to keep them from being bitten and to please the dog's owner. We all know pet lovers who consider Fido part of the family, so toss him "a bone" as well.
Drivers at Asheville Pizza & Brewing Co., in Asheville, N.C., keep handy a cache of candy, rubber balls or stickers for kids. Not only does this make parents happy, it courts key members of the family whose meal-time votes carry a lot of weight.
I don't know if Asheville still does this, but years ago it was delivering diapers, milk, bread and beer along with pizza and ice cream. As young parents themselves, the owners knew customers often purchased their pizza because they hadn't had the chance to go to the grocery that day for dinner ingredients. Last I heard, the program was working well. (Asheville's original "extra service" idea of putting two pieces of bubble gum in every pizza box was good in principle, but bad in execution. Seems hot, steamy pizzas turn bubble gum into mush.)
Perhaps the most beautiful thing about increasing your level of service is that most times it costs nothing. Smiles and compliments are absolutely free, though a 50-pound bag of dog biscuits and a box of bubble gum costs a few bucks. Most important is that such gestures yield major dividends in terms of future sales. Since pizza is fairly standardized, it takes a really good one to be memorable. But when service is, by and large bad, great service is about impossible to forget.
February 22, 2006: Comedy Gold
I've met a lot of people and heard a lot of hilarious stories in this business. From the blue-jeans-clad independent operator to the stiff-shirted chain exec, to the smooth-talking manufacturer's rep, I've heard gut-busters that I think can't get any funnier, and then someone tops them.
What's unique about hearing an independent tell a story, however, is that they'll share it when they want and with whom they want. Nearly always on the record and even before a tradeshow audience. They've got no corporate policy restricting what they say or how they say it; they're their own bosses and they speak their minds whenever they please.
During the North America Pizza & Ice Cream Show, Feb. 19-20, in Columbus, Ohio, Mark Gold, co-owner of Pizza Shuttle in Milwaukee—a single-unit operation grossing almost $5 million in annual sales—threw down the gauntlet down when it came to funny stories.
During dinner the night before the show began, and during a Presidents Panel seminar during the show, Gold told one terrific tale after another about running one of the world's busiest pizzerias. I've said many times that Anthony Bourdain's book, "Kitchen Confidential," can't be topped as the ultimate tell-all about the restaurant industry, but a think a book about Gold's exploits might give it a run for its money.
Part of what makes the garrulous Gold so funny is he isn't trying to entertain, he's just talking about his day, his life, his kids, a night at his pizzeria, all mundane stuff for most people. But before you know it, you're hooked and he's reeling you in. A few tidbits of his tales ...
On the crazy demographics in the neighborhood where Pizza Shuttle's located: "We've got a strange neighborhood: whites, blacks, gays and Latinos all live there. And everybody stays kind of separate until late at night—we stay open until 4 a.m.—and then they go get drunk somewhere else and want to come to our place and fight each other. We have to have security guards on big nights. ... You have to walk up stairs to get to our place, and it's not unusual to see a few guys handcuffed to the stair rail waiting for the cops to come pick them up."
On the struggle to sell alcohol—in Milwaukee: "Our customers don't get drunk at our place. A lot of them show up drunk. I've got a full liquor license, but I don't sell much of it. The day I quit selling daiquiris and started selling Slush Puppies was about the most profitable day in my business. Here we are, a pizzeria in Milwaukee, and we can't sell beer to save our lives. It makes no sense. Good thing we sell tons of food."
On finding good employees: "Of the 110 people we have working for us, the majority of them have been there for two years or more. So we do pretty good keeping them. But when you have 110 employees, you're going to hire some characters, and I'm on a first-name basis with every parole officer in town."
On his weather-delayed flight to Columbus from Milwaukee: "It was freezing this morning, about zero back home, and nobody at the airport had the sense to make sure the fuel trucks would start in the cold! They couldn't bring the fuel to the airplane, so we couldn't leave on time. So, I'm thinking, 'This isn't Miami, it's Milwaukee. We get a warm winter and everybody forgets we could be freezing our butts off in the middle of February?' ... I had to go to the bathroom, but I didn't want to miss my plane. So I thought I could just wait and go on the plane. But I get on and it's one of those with propeller planes that's so small they don't even have flight attendants. The pilots get in the cockpit, lock the door and leave you back there on your own. And all you've got is this mail slot in their door to communicate with them. No bathroom, no talking to the pilots. It's kind of like prison, I guess."
On the truly weird ... A death threat to President Clinton during a visit to Milwaukee gets traced back to Pizza Shuttle: "So the Secret Service was just grilling my partner, Louie, and me, and they're asking us what we know about it, and we know nothing. And Louie doesn't like too talk much anyway, and they keep asking him all these dumb questions and he's getting pissed and the whole thing is getting ridiculous. ... They eventually leave us alone, but they come back a long time after that asking us about one of our cooks. I say, 'Yeah, he works here,' and when we went up to get him, he takes off running out the door. Now I'm really pissed because this whole thing—that I didn't have anything to do with—cost me my best cook! ... And we still don't know who sent the death threat."
On the pace of business at Pizza Shuttle: "Last night (a Friday) we did $23,000. It was insane. The cold weather kept everybody in and they wanted delivery. ... It was so cold outside it was screwing with the rubber on the drivers' tires. I'm wondering if they should even be out there if their tires aren't working, but what are you going to do? We were so busy we didn't really think about it. And they were making good money, too.
"A typical night is about $15,000, and that's on top of a lunch of somewhere between $4,000 and $6,000. ... If you'd have asked me if I ever thought we'd be that busy, I'd have said you were full of it."
The following was submitted by Randy Blair, owner-operator of Pizza and Pipes in Santa Clara, Calif. This is a compelling tale and a must-read for every operator — independent or chain. — Editor.
December 2004: I'm drowning and the water is so deep that I can't see the bottom.
Having just left an executive position with a failing real estate company, I returned to work in my pizza restaurant, which I had left on autopilot for two years. I faced more than just the challenge of running day-to-day operations. I was personally weighed down by $13,600 in payments for two bad investment properties heading for foreclosure, plus two car payments and my rent. I can't keep my head above water. My pizza shop can't pay me nearly enough, my restaurant lease expires in June, Christmas is coming, my 77-year-old mom is in the hospital and my wife's lost faith in me.
Were I to get out of the mess I created, I had to shed my debt and radically increase my pizzeria's sales. I did sell one of the properties and one of the cars, but the restaurant lease was still trouble. I was paying $3,000 per month on an old lease — when the market rate was more like $10,000. I ended up at $9,500. Ouch.
Looking for salvation, I headed off to Rory Fatt's Restaurant Marketing Systems (RMS) boot camp in March 2005. With nothing left to lose but a couple thousand dollars, I put the whole trip on my credit card. Within two hours at the boot camp, it became obvious that I was in the right place.
Let me say this right now: I am not an employee of RMS, but I am a huge believer and advocate of what it can do for the businessperson who applies its teachings. Wouldn't you be if you increased sales by $185,000 in one year?
A new tune for Pizza and Pipes
So how did I do that? That's the question everybody asks me now. First of all, it was a lot of hard work, mixed with a lot of faith, self discovery and a little luck. Second, at boot camp, I joined RMS at the highest membership level, platinum plus. Third, I took action, lots of it.
When I got back from boot camp I made a list of 100 things to do and prioritized them by cost and expected return on investment of both time and money. The list covered all aspects of business including new marketing systems, changing the menu, improving service, making repairs, changing décor and measuring results of every promotion. With priorities in order, I started driving myself and everyone else forward, and we started achieving everything in my plan. I met with my managers weekly to review the action items and assign or adjust deadlines to get more items done.
Key aspects of the plan included the following:
As things moved forward I quickly saw the value in exchanging ideas with the Platinum Plus group and other RMS members. I became a regular contributor to two different discussion forums and added as much value to them as possible. We ended up becoming the best restaurant mastermind group I could imagine. That's the real secret to my success and the success of others in the group. We all share our ideas and results freely and adopt successful marketing that others are doing.
While I'd love to tell every reader exactly how I raised my sales by $15,000 per month, it would be fairly impossible to do so in print. It was a lot of trial and error, of course, but mostly it was an intense nine-month learning process during which I applied as much of my new marketing knowledge as possible. Rory Fatt sent almost too much monthly and weekly information, but I did manage to listen to every CD and I read every newsletter. Gradually I transformed myself into a marketing expert. To date I have invested over $10,000 to educate myself, but boy, the payoff was worth it.
As for my advice, I'd start with the cheap stuff first, such as giving "Hurry back!" coupons to each customer. We played with different formats but ended up with deals of 30 percent off within seven days, 20 percent off in 14 days and 10 percent off in 21 days. We also offer all local merchants 20 percent off all the time, and we give 20 percent off cards to people at offsite parties that we cater. My fundraising cards are also inexpensive to print and they bring in new customers and promote frequency. You can see them on my website, pizzaandpipes.com. From April to December 2005 they brought in over $30,000 in new sales.
Here's what else I have going right now
You can do this, too
Sales are up 16 percent so far this year and we have a shot at reaching $1 million.
Now I could walk into any struggling restaurant, start implementing a great marketing system and increase sales almost immediately, but that's not the point. The point is you can do it too. Your life could be transformed but you need three things.
You can continue to muddle along and let guys like me take your market share or you could fight back. I urge all restaurant owners to get out of the kitchen and into marketing. It is the best investment I ever made in my business. Along the way, I rediscovered my love for the business and wonder why I ever strayed in the first place. I look forward to work each day now and I have a lot more to accomplish.
You don't want to duplicate the situation I was in, but here's a little trick you can use to motivate yourself. Set up a $2,000 to $3,000 automatic monthly transfer from your business checking into a business savings or investment account beginning in three months. That will put financial pressure on you that will be motivating. Call it a rent increase that you can draw on at a later date. Whatever amount you choose, see if you can increase sales by twice the number of dollars you transfer. Not only should that take care of your operation's food and labor cost, it will allow you to leave that money in your savings.
Rough sailing becomes smoother seas
While this condensation of my experience might make it sound like I enjoyed some smooth sailing along the way, I can tell you it didn't. Throughout the year, my wife, who really managed the business when I was off playing real estate investor, felt somewhat excluded from decision making as I steamrolled forward without consulting her enough. We had a few ups and downs, but came away stronger than ever. But if I had to do it over again, I might have put the brakes on a little. Still, desperate times called for desperate measures, and I was desperate to move my foundering ship.
P.S. Mom's back on her feet now, too.
Randy and Lidia Blair have owned Pizza and Pipes restaurant in Santa Clara, Calif., since 1999. In 2005 they took two family vacations and several free days away from work.
Read also Who's Who: Randy Blair
Jan. 19, 2006: Pizza is not fast-food.
I've thought that for some time, never discussed it, but now I've written it.
Despite the claims of restaurant analysts who lump pizza into the fast-food category, it's not even close to fast-food or even quick-service food.
Think about it: Outside of getting pizza at a slice joint, there's really nothing quick or fast about buying a pie. On average, any customer who walks up to your counter and orders a pizza will have to wait about 10 minutes or less, and delivery takes about three times as long. By comparison, McDonald's goal is to complete every drive-thru transaction in about 2 minutes. That's fast, and that kind of turnover isn't happening in the vast majority of pizza businesses (though I'll touch on some exceptions later).
So why is it considered fast-food?
Maybe it's the simplicity of it. You eat it with your hands, it typically doesn't require seasoning and dinnerware isn't necessary. So, like a Taco Bell burrito, it's simple to consume and cleanup is a snap.
Maybe it's the check average. A $12 large pizza can feed three people for $4 apiece, which is close to the per-person tab at burger joints. In the minds of most consumers, value-priced food is fast-food.
It could be the debatable nutritional value of pizza. Since white flour is high in carbohydrates, mozzarella cheese is moderately fatty, and pepperoni and sausage are the most common toppings chosen, you don't hear pizza being called "health food." And if any negative connotation — fair or not — is regularly wed to fast-food, it's "junk food."
Or perhaps it's pizza's image. Chain domination of the industry results in highly standardized operations and products, and that mirrors other truly fast-food chains. But just because your food and systems are consistent, does that make your product fast-food?
I say not, and here are some other reasons why.
Other than Little Caesars, which executes its Hot and Ready pre-baked pizza program during the dinner rush, most pizza companies make every pizza to order. Some may sauce and cheese some pies in advance, but they're not baking and holding fully cooked pizzas.
This runs counter to how it's done at fast-food burger, chicken and fish chains, where batches of food are cooked in anticipation of a predicted number of customers filing through the doors at certain times. Ideally, customers order, the food's ready for packaging, customers pay and off they go. If it's not fully ready, microwave ovens hasten the process.
This is not the way it's done in pizza.
I've gotten sort of hung up on this "fast-food" label since PizzaMarketplace's parent company, Networld Alliance, purchased two Web-zines, FastCasual.com and QSRWeb.com, in 2005. (It has since developed the print publication Fast Casual magazine.) That caused me to read more about the quick-service segment and led me to realize how pizza is commonly — and wrongly — compared to other quick-service concepts.
That led me to conclude this: Pizza is a category in and of itself, neither fast-food nor quick-service food.
Sure, there's some menu and service-model overlap with other segments, but that's about it. A pizza kitchen is not run like a burger or chicken kitchen. Burger folks don't manage dough, and pizza folks don't have Henny Penny fryers everywhere. Plus, pizza is the only major foodservice segment whose operators delivers to customers' doors.
What's to gain by being considered apart from other fast-food/quick-service vendors? Perhaps a better understanding of the pizza industry overall, its customers' purchasing habits, how and why they decide to purchase pizza as opposed to something else. It may also help pizza operators to learn how to better serve consumers in the future if the waters aren't muddied by unusable data about burgers and chicken.
All that said, I want to make clear I'm not saying fast-food is bad. I'm merely saying American pizza shouldn't be grouped with other fast-feeders ... for now. For if you take a look west, and I mean waaaaay west, to Australia, you'll see the world's one-and-only pizza chain that's truly a high-quality fast-food operation: 160-unit Eagle Boys Pizza. It earns that distinction with its 2-minute drive-thru pizza system. When I was there in 2004, I was amazed that no one had ever thought of this. It's ingeniously simple, but like all good systems, it takes finesse and focus to execute correctly. (Read also Drive-thru: where pizza needs speed.)
The 2-minute system works like this: Drive-thru and carryout customers choose from a menu of four popular pizzas that are continuously baked between 5:30 p.m. and 8 p.m. daily. If customers don't receive a pizza within 2 minutes after placing their order, their next pizza is free.
Central to the system's success is the use of temperature-controlled warming cabinets that hold baked pizzas. Lighted timers on each shelf of the cabinet let staffers know when pies are approaching their 30 minute maximum shelf life. Ideally, said Eagle Boys owner and managing director Tom Potter, they are never held longer than 10 minutes.
Potter hit on the idea after watching cars flow through drive-thru lines at fast-food restaurants. After years of wondering how Eagle Boys could capture some of that business, he developed a drive-thru system that wasn't a mere 10-minute pick-up window. Two years later the company began rolling the system out in franchise stores. About 15 percent of the Eagle Boys system offers the service, and those stores post sales some 35 percent higher than traditional models.
Potter told me several months ago he believes this innovation will launch his "business out of the sand pit and into the main arena. There's no doubt about it: The closer we can get to performing like KFC and McDonald's, the better for our industry."
And when that happens, I'll be ready to call pizza fast-food.
Dec. 8, 2005: Grow your business by putting on a parade
Eager to generate some community spirit and some new business for her pizzeria, Debbie Taranto-Antoun decided to organize a parade.
Yes, a parade.
Creating a new pizza or developing a new marketing program would only address the business end of her goal, and that wasn't good enough. She wanted something her community of Orange Township, Ohio, would get excited about, participate in and remember.
Boy, did it ever.
"There really are no community events like this, so I formed the Orange Township Business Association and suggested we do this for our first big event," said Taranto-Antoun, discussing the July 4 parade. "I had no idea it would get so big. For a first parade, it was crazy."
At least 2,000 locals participated in the parade and another 3,000 lined the roads to watch them. There was a Taranto's Pizzeria float carrying family members, including her uncle who dressed like Dean Martin and lip-synched "That's Amore." As the float went by, the crew passed out coupons for $4.99 large cheese pizzas, and almost immediately, the redemptions began.
More than five months later, the resulting business boom has yet to bust.
"My sales have increased by $4,000 a week since that, and I've had to hire six new people," she said. The parade also was covered in the local paper and by local TV news outlets. "I thought sales would taper back down after that, but they've continued to go up."
No other marketing gimmick or advertisement Taranto-Antoun has done before has drawn such a response. Why was this one successful? She credits the fact that it benefited the community, not just Taranto's.
"This shows that it doesn't cost money to get involved in your community, it just takes time."
Nov. 15, 2005: Service is the key differentiator
In June, a family from Long Island, N.Y., moved into the home next door. Great people, cute kids, the kind of neighbors everyone wants.
Given their love of true, New York-style pizza, I figured there were only a handful of places in the Louisville area they'd like. So I told them of a shop that I thought would interest them.
Their first visit didn't work out so well. The line out the door was so long they never got inside — a frustrating experience on a 96-degree day, but a good sign in their minds that this pizzeria was the hot ticket in town.
Then, a few weeks later, when the man of the house returned to the pizzeria to pick up a phone order, he was told there was nothing for him. Surprised, he explained how he'd phoned in the order just minutes before from his car and described the pizzas he'd requested.
No such record of it, he was told.
After a brief discussion with the franchisee, they figured out my neighbor had placed his order at a cross-town outlet by the same name, and after a call to that store, it was confirmed the order was there.
And here's the shocker: The franchisee didn't offer to make the order my neighbor placed at the wrong store, he told him to go pick up the pizza at the store where it was ready — 20 minutes away.
A missed opportunity
Had the franchisee been focused on the customer, he would have had made the order in his own shop and without hesitation. Humans make mistakes, and it sure makes the world a lot more pleasant place in which to live when we can help a guy out — especially an out-of-towner with an obvious New York accent just getting used to his new surroundings.
Even in low-traffic, get-anywhere-fast Louisville, a trip to the other store would delay my neighbor's dinner time by almost an hour, but believe it or not, he went and got it. Why the operator didn't spare him the drive, I don't know. What I do know is it was a poor choice that'll cost him.
The operator not only missed an opportunity to do the right thing by my neighbor, but to land a customer for life. He should have made the order, given it to my neighbor for free and called it a "Welcome to Louisville, sorry for your trouble," present.
I'm sure you're thinking I'm awfully generous with that pizza guy's money. But the truth is, the idea isn't mine. It's a tip I've heard time and again from some of the greatest pizza operators in the industry, guys and gals who would have given that customer a freebie just to make a friend and a long-term customer. They know that when customers are put first, business follows forever.
But this operator didn't.
And let's be honest here: My neighbors are New Yorkers who eat cheese-only pies. So what would it have cost the operator to give him a gift: $7 for two larges? Had he done it, that small investment would have come back to him tenfold. Instead, his denial will come back to hurt him.
My neighbor is in banking and spends his days driving all over town assisting automobile dealers with finance plans. So do you think there's a chance that negative experience at this pizzeria will come up in a lot of conversations?
I'd say that's a safe bet.
I'm certain my neighbor will never revisit that pizzeria, and the treatment he got makes me wonder whether I'll return there.
Service is the differentiator
In general, food prepared in restaurants is of such basically good and comparable quality that trying to compete on product alone won't grow a business much. Unless an offering is exceptional and memorable, it really doesn't stand out in such a competitive market.
But restaurateurs who know service means sincere interaction with customers, getting orders correct, anticipating needs and providing beneficial upselling — not mere robotic delivery of a product — will win customers' hearts and minds. Humans will always want to be treated as humans, not just open mouths eager for a filling. But given the lack of attention to service efforts — as was the case for my neighbor — you'd think that isn't the case anymore.
Nov. 10, 2005: Two final tips found at the New York Pizza Show
One of the toughest things about covering a tradeshow is deciding which events to write about and what moments to mention. And after scouring my notes one last time, I knew I'd be remiss if I didn't mention these last two nuggets of information picked up during a couple of seminars.
** In a session on operating multiple units, E. Jay Meyers, co-founder and president of eight-unit Goodfella's Pizza, said one benefit of such an operation is the shared cost of advertising. Instead of one store spending all the money to saturate a market with its message, multiple stores can divide up the load or spend equally as much to drive the message wider and deeper. That includes buying larger runs of print materials to get a lower cost per piece.
When asked how best to manage printing the contact information for multiple outlets on the same printed piece, but without driving up the cost of printing, he said to "black plate" the address and phone number section. For those who don't know what he means — and some in the audience didn't — here's all the explanation you need: The cost of four-color process printing increases every time any of four colored printing plates are changed. If you leave the address and phone number in black only, then just the black plate is changed when the information needs to be different, and that's significantly cheaper than changing all four.
** Lastly, Lombardi's owner John Brescio recalled a time when he started getting lots of calls from customers who said their delivered pizza was cold. Baking and delivery times were consistent as ever, so he was befuddled as to the cause of the problem. After some investigation, Brescio and his son, Mike, figured out their box provider switched to a lower-grade corrugate without telling Lombardi's. The paper lacked the proper density for heat retention, which caused the pizzas to cool too quickly.
When Brescio figured out the problem, he, um, shall we say, convinced the box provider that recompense was in order. When Lombardi's started getting the right boxes, the cold pizza problem vanished.
Nov. 9, 2005: Resin shortage raising cost of delivery bags, trash can liners
Most operators think little about the price of trash can liners because they're a cheap necessity. Don't be surprised, however, when their prices go up and their availability declines this year, warned Joe Peccatiello, territory manager for Rubbermaid. While talking with him on the show floor at the recent New York Pizza Show, Peccatiello said Hurricane Katrina's visit to New Orleans damaged the world's two largest resin plants, both of which are key suppliers to manufacturers of plastic products.
"There is a worldwide resin shortage right now, and American manufacturers are having a hard time finding it," he said. "It probably will affect the price of delivery bags some, but it'll really affect the price of trash can liners.
"People say, 'Oh, they're trash can liners. What's the big deal?' Well, they'll be a big deal when you can't get your hands on them, and that's possible this year."
Peccatiello doesn't know how long the shortage may last, but he said it's something to which operators should pay attention.
Nov. 7, 2005: More scuttlebutt from the show floor at the New York Pizza Show
Internal Revenue Service studies show that some pizza operators are less than honest about reporting their sales. Yeah, I know, earth-shattering statement, right?
The tax management body's landmark audit tool, "Market Segment Specialization Program: Pizza Restaurant," published in 1995, made clear how serious it is about ensuring these businesses pay their fair share to Uncle Sam. (If you don't know about this, click here to read more.) Here's the Cliff's Notes version on the piece: If you think you're clever enough to avoid a paper trail, the IRS will show you how able it is to create one for you. And if you're busted, expect a serious fine on top of back taxes owed.
But as any POS vendor will tell you, that threat apparently doesn't scare some bent on shorting the government. Though none would speak on the record, every POS vendor I talked to at the show (as well as others I talk to regularly for other stories) said between 25 percent and 30 percent of prospective customers ask them regularly, "How can I use my POS to erase my sales?"
Here we have the greatest restaurant numbers-management tool ever created — a tool that has demonstrated its proficiency for boosting operator profits — being used to cheat on taxes.
This is not a problem specific to the Northeast U.S. POS vendors say they're asked by pizza operators everywhere to show them how to delete a portion of their sales secretively. This problem is particularly prevalent among independent operators, which makes sense; franchise systems have this peculiar thing about getting every penny of royalties due them, and that makes it a stiff challenge for franchisees to pocket untaxed cash.
Don't get me wrong, I hate taxes as much as the next guy. Plus I hate the way government wastes my money. Were I in charge, we'd be using the consumption-only tax plan being discussed in some circles on Capitol Hill. But for now, the law is the law and, like it or not, the vast majority of people obey it.
So, to the slackers out there cheating their fellow Americans, buck up, build some character, show some integrity and pay your share like the rest of us.
Nov. 4, 2005: Richness and wretched excess not hallmarks of Italian cooking, says Miele
During the recent New York Pizza Show, I had the privilege of interviewing Pepe Miele, president of Verace Pizza Napoletana Americas and owner of Antica Pizzeria in Los Angeles. (If you're not familiar with VPNA, read New York Pizza Show: VPN pizzaioli aren't pizza snobs, says Miele.)
Lured by photos of palm trees and Harley-Davidson motorcycles, Miele moved from Naples, Italy, to Los Angeles in 1986. Soon after he emigrated, the skilled restaurant cook realized the wide disparity between Italian food served in his homeland and that served in America. Portions and richness of ingredients here bore the most startling differences.
"A pasta portion in Italy is about 70, 80 grams, but here it's 300 grams!" said Miele. "Why it's so much? Why it's so rich? Why so much cheese? In Italy, you feed a family with the same portion."
Miele's reaction to American pizza was identical. "It was a humongous pizza slice, about 12 inches. I thought, 'Come on! What is this?' It was a very not-common taste for me. Such an abundance of product, of cheese, of dough — of the crust and the edge. Just the weight of a slice of Neapolitan pizza is 60 percent less — including the box!"
Miele started and ran a restaurant serving "traditional Italian cuisine" from 1987 to 1990, when he changed formats and opened Antica Pizzeria. His dedication to Neapolitan-style pizza — and its inherently lean portions — hasn't faded. Less is more, he believes.
And while his own midsection appears to bear witness to his time in the land of culinary excess, Miele believes real Italian food is misrepresented in U.S. restaurants. He's encouraged by the number of chefs travelling to Italy to learn how Italians really eat, but he's concerned their patrons aren't quite as interested in eating the real thing as those chefs are about duplicating it.
"In Italy, you don't get spaghetti and meat in a bowl combined, you get spaghetti and meat, and you take a little of this and a little of that," he said. "All this food ... it's not necessary to be authentic."
Nov. 2, 2005: New York Pizza Show update. Lombardi's Brescio holds court
The business-building seminars offered at the New York Pizza Show and similar trade gatherings are invaluable. But without question, my favorite sessions are those in which operators get to be themselves and speak from the heart. One such seminar saw John Brescio tell how he resurrected Lombardi's Pizzeria from semi-closed obscurity in 1994 and returned it to super-star status. Brescio told the gathering "I ain't no professional speaker, but I'll do my best," and he set off on the story. Seven minutes later, he'd said all he could think of and asked if anyone had any questions.
What? No secrets? No regaling the group with stories about the stars and starlets who frequent New York's most famous pizzeria?
Seven minutes was all it took to prove that the one person in the room completely unimpressed with John Brescio was the man himself.
Then the questions began: What's it like to bake with a coal oven? What's it like competing in the world's toughest pizza market? How the heck can you deliver pizzas on bicycles in wintertime -- in the snow?
With booming voice and broad grin, Lombardi answered them all with patience and humility. To wit: "I ain't no genius; I never went to college. ... But if you work hard at what you do and commit to making your pizza the best in your market, you'll succeed."
Again, no breakthrough secrets, just promises that a relentless pursuit of the best ingredients, a passion for products and an absolute love of customers will make any business a winner.
But even Brescio admits success has its drawbacks: "I worked 17-hour days every day for a long time. ... I wound up with four stents, high blood pressure and a little sugar. ... You've got to find a way to do what you can every day, get outta there, go home and forget about it for a few hours. ... No doubt, if it wasn't for medical technology, I'd not be here today."
Of every point he made, he stressed hiring the right people and training them well as the most important. The key: Find people who really care about the product and work with them constantly until they can train others. That kind of training doesn't take a few weeks or even a few months, it takes years and lots of follow-up, he said. The yield of such labor is just a few great pizza makers; two of his have been with him for 11 years, another eight years. "The others, they're OK or they don't really care. ... It's hard to find good people, so I make sure to take care of the really good ones."
Nov. 1, 2005: You see charred edges, I see perfection
When I first visited New York in 1990, most folks I knew warned me not to travel north of 90th St. Back then that was considered the southern-most point of Harlem and still befit its legendary reputation as a rough neighborhood.
What a difference 15 years and a strong mayor — in this case, former Mayor Rudi Guiliani — make.
Last evening, I and several associates ventured safely to 118th St. and 1st Ave. to Patsy's in Harlem, one of the city's legendary coal-fired pizzerias. There is, quite simply, nothing like coal fired pizza: the way it marks an impossibly thin crust with irregular black, bitter blisters, or the way it concentrates a crushed-tomatoes-only sauce to simple sweetness in about 2 or 3 minutes cooking time.
Some at our table weren't sure what to think when the first pizza, with its characteristic charred edges, came to the table. One wondered aloud if the pizza was overcooked, but knowing that when they ate it that they'd love it, I said nothing and let the pizza do the talking. It didn't take long before another experienced the expected epiphany: "So this is supposed to be like this!"
Three pizzas later, the scales gone from their eyes — and not a scrap remaining — the five of us took a tour of Patsy's kitchen to see the ancient coal-fired oven. A few looked into the mouth of the brick behemoth before backing away quickly away from its volcanic breath. All had seen their share of conveyor and deck ovens, but they'd never seen a coal oven, never watched the flames curl upward from the gray-and-black mound of coals and lick the ashen oven's low ceiling. Again, an epiphany. "This is how they cook it at Lombardi's and John's?" someone asked. Yes, though the results are a bit different — but pleasurably unique — in each case, this is how it's been done for a century in New York.
Oct. 27, 2005: On bookstore shelves now: "Everybody Loves Pizza""
Do we really need another pizza book?"
That question came to mind — but not to mouth — when Penny Pollack, coauthor of the new book "Everybody Loves Pizza," called me last year in search of sources.
And after receiving the book a few days ago, I can say that she and coauthor Jeff Ruby (Chicago magazine dining editor and senior editor, respectively) have answered that question with a resounding yes.
As we talked last year, I asked Pollack if she'd seen Peter Reinhart's work, "American Pie: My Search for the Perfect Pizza," or Ed Levine's tome, "Pizza: A Slice of Heaven." (Tony Gemignani's "pizza," hadn't been published.) My question implied, "Those are great books, so how will yours be different — and good?" Pollack understood what I meant and said hers would take a different tack from those forerunners by centering on tales told by pizza makers and pizza eaters, and then binding them with the industry's colorful history and lore.
Frankly, it didn't sound all that unique, but her excitement about it was infectious. And for good reason. This is a fun book.
"Everybody Loves Pizza" contains all the requisite yarns about pizzeria legends and stories about industry giants like Pizza Hut cofounder Frank Carney. But it also introduces readers to many new players like Ed LaDou (arguably the father of California-style pizza) and Chris Bianco (Bianco Pizzeria's passionate artisan pizzaiolo). Scattered throughout is clever pizza trivia, such as celebrities' favorite places, the seven most memorable silver screen pizza moments and a Q&A with the industry's oldest pizza driver. And despite its rather subdued cover, the number of fresh photos and eye-catching graphics make the book a pleasure to view.
Pollack and Ruby will no doubt step on some toes with their picks for the 10 best pizzerias in America, and in a country with 63,000 pizzerias, their attempt to dub 546 of them "great" will fall short in the eyes of many. (But as a fellow journalist, I urge readers to give them a break here. That round-up included calls to hundreds of pizza folk, food editors and the like in many U.S. cities to learn what the locals in each liked best. That's neck-wrenching work.)
All in all, this is a delightful book both pizza operators and pizza lovers in general will enjoy. To find a copy for yourself, just go online.
Oct. 26, 2005: Florida produce pummeled by Hurricane Wilma, prices will rise
For the second year in a row, much of Florida's fresh produce has been destroyed by a hurricane. (Read also, Red Alert!)
According to a report in the Miami Herald, prices are expected to soar as soon as the state's farmers assess the destruction wrought by Hurricane Wilma. Sunshine State growers say tomatoes and peppers "may be wiped out."
In a report in the Naples Daily News, Florida Tomato Committee manager Reggie Brown said because Hurricane Wilma's arrived late in the growing season, price increases probably won't be as high as last year.
Last fall, when four hurricanes combined to wipe out much of Florida's fresh produce, prices for tomatoes and peppers rose to as high between $50 and $60 per case, about four times the average. About six weeks later, prices fell back to normal after farmers had a chance to replant.
Oct. 25, 2005: People: The real power behind great chains
During Domino's Pizza's third-quarter investor conference call today, chairman and chief executive David Brandon had plenty to crow about. Profits are up, Domino's international business continues to grow and domestic comparable-store sales for the period were solid, if not sexy.
Yet despite Brandon's obvious pride in the company's performance on paper, he seemed most pleased with its efforts to help victims of Hurricane Katrina, including the company's largest franchisee, RPM Pizza, headquartered in Gulfport, Miss.
Of franchisee RPM's 140 Domino's units, 86 were closed by the Aug. 29 storm. In less than 24 hours, fellow store operators — some, not surprisingly, from the state of Florida, which has endured eight hurricanes in two seasons — were on their way with gasoline and generators. (Read also HURRICANE KATRINA: Regrouping, rebuilding and reopening.) Others came from as far away as California and Minnesota to get their colleague's units up and running. In less than two weeks, 65 of the 86 closed stores had reopened, and today only 14 remain shuttered. Those, said Brandon, won't reopen soon because the neighborhoods and businesses around them remain uninhabitable.
It bears mentioning that Domino's headquarters told operators in the stricken area to feed rescue workers for free and that it would pick up the tab. Brandon wasn't sure how many pizzas that amounted to, but he estimated it was in the tens of thousands. (When I last spoke to Richard Mueller, chief operating officer of RPM Pizza, five weeks ago, he put the number at 20,000.)
Such generosity may not have impressed stock analysts staring at Domino's P&L and questioning its executives on the call, but I doubt Brandon — or Mueller, for that matter — really cared. As anyone who has been involved in disaster relief efforts will tell you, when a desperate need exists, people come first and profits go on the shelf.
Oct. 24, 2005: Loyalty Program Gives Pizza Hut Better Slice of the Pie
* Editor's note: This story about the success of Pizza Hut's VIP customer loyalty program was linked to our news items last week. With permission from DMNews, the online newspaper for direct marketers, it appears here in its entirety. This is highly suggested reading.
ATLANTA — Pizza Hut Inc. is getting a bigger piece of the pizza market, thanks to a loyalty program it began two years ago.
The fee-based program called VIP: Very Into Pizza, has increased the company's incremental orders by 93 percent from members over a matched control and raised incremental net sales 65 percent. The program was discussed at a session at DMA·05 here yesterday.
Pizza Hut, Dallas, a subsidiary of Yum Brands Inc., launched the loyalty program because customers were switching among Pizza Hut, Domino's and Papa John's looking for quality product, service and value.
"With sales deterioration category-wide, Pizza Hut realized it had to retain and reward its best customers," said Nagwa Pfingston, vice president and account director at Dallas-based Hawkeye/FFWD, the agency Pizza Hut worked with to start the program. At the time of the program's launch, Pfingston worked for Pizza Hut.
Pizza Hut knew that even a small shift in share among better customers generates large incremental profits, Pfingston said.
The company did research to prepare the program. Pfingston said that Pizza Hut looked at other loyalty programs in the space, "but we had yet to find one that was compelling to customers and also cost-effective."
The company gathered insight to identify customer behavior patterns. It interviewed Pizza Hut customers, reviewed existing research, built an analytic data mart based upon 5 million customers and performed a customer potential analysis. The company was in a unique position to gather customer data because, unlike its competitors, a large majority of its customers order via phone or online, so the company had customer data to work with.
From these learnings, Pizza Hut segmented customers into three groups: best customers, customers with potential to become best customers, and customers who switch often versus those who simply have low frequency. The company tested loyalty programs targeting these customers in three markets but received the best results from the fee-based program.
The program costs $14.99 yearly to join, and members get their first large pizza free. Other benefits include receiving a free pizza during the month when spending amounts are reached, free breadsticks and cinnamon sticks every month, and relevant coupons mailed to members monthly based on past behaviors.
To communicate the program, Pizza Hut uses direct mail, e-mail, Web sites and in-store promotions. Before the launch, it also developed call center training guides, quick reference guides and Web-based customer enrollment tools. It acquired and installed call center equipment and developed its database to manage customer targeting, order taking and reward fulfillment.
The company monitors the program weekly and studies customer behavior changes.
Pizza Hut's program is a success for both its best customers and other customers as well.
"While VIP grew our best customers by 300 percent, there was a 65 percent increase in spending across all of our segments as a result of the program," said Kira Lewis, manager, loyalty and data insights at Pizza Hut.
The program is evolving, Lewis said. This year Pizza Hut launched new creative, and it is testing different offers.
The fee is a key component. Paul Bowman, managing director, direct and loyalty marketing at Hawkeye/FFWD, said that Pizza Hut initially did not want a fee-based program.
"They thought, 'Why are we going to ask our best customers to pay to be in our program?'" he said. "But we explained to them that if customers pay, then they change their behavior."
Bowman also told the packed audience at the session three mistakes that many companies make when developing their first loyalty programs:
Oct. 21, 2005: Critically injured driver still in ICU, improving, but comatose
Nate Bollinger, a Lincoln, Neb., Papa John's delivery driver, who suffered life-threatening injuries six weeks ago in a work-related car crash, remains unconscious and in intensive care.
According to Nate's boss, Richard Waldron, he is improving some. Doctors replaced a large section of Nate's skull, which was removed to make room for his swelling brain, and Nate's mother is encouraged by his increased responses to touch.
Worker's compensation is covering Nate's wages and medical expenses, and to date, about $3,700 has been donated from outsiders and the company.
To read more about this tragic incident and how to donate to Nate's cause, click here.
Love the ones you're with; it's working for Pizza Hut
An article in DMNews, linked yesterday to the news section of PizzaMarketplace (Fee-based loyalty program drives sales for Pizza Hut), provides abundant proof that customer loyalty-reward programs really work when they're done well. The story details Pizza Hut's VIP (Very Into Pizza) program and how it has garnered dramatic sales increases from existing customers.
Most interestingly are these facts: those customers paid $14.99 to be members of the program, and the entry fee plays a major part in motivating people to be loyal to the chain.
If you've not already read it, I encourage you strongly to do so.
Oct. 20, 2005: Drop the cash at the store; don't share it with thieves
A recent report in the Buffalo News detailed the armed robbery of a delivery driver that yielded $350. According to the story, the driver approached the residence where he was supposed to make the drop and a man on the porch told him to deliver the food to someone at the back of the house. There, the driver encountered a man bearing a shotgun, and who ordered the driver to give him his money.
The question everyone is surely asking is: Why was this driver carrying so much cash? Was it his personal money or was it his night's take, which he'd not dropped off at the store like he was supposed to? Does that store's owner/manager not have a cash-drop policy or enforce the one it has?
The good news is the driver wasn't harmed and he'll probably be wiser for the experience. The bad news is the same thugs who executed the set-up are likely so emboldened by that episode's spoils they'll repeat the crime. (Well, let's be fair here and state that criminals are stupid and they'd probably try it again even if they got 35 cents.)
The bottom line is this should serve as a reminder all in the pizza delivery business about following policies for carrying minimal cash when away from the store.
Oct. 18, 2005: Nu