News

The price is right

October 3, 2005

The scenario is all-too-common: A customer presents a coupon for a $9.99, three-topping pizza, but he only wants one topping. The order-taker rings up the pizza for $9.99, but then deducts the price of two toppings at $1.25 each. The result is the customer gets a super-bargain for $7.49.

Many POS systems have a "ghost topping" key, which, when used, ensures that $1.25 is charged for each of those unused toppings, but many operators admit they don't know whether their order-takers use it consistently.

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"Some employees just don't care and they don't hit the key, and new employees, especially, forget it," said Don Dixon, a four-unit Hungry Howie's Pizza franchisee in Sarasota, Fla. "In a busy store, I bet an operator loses $300 a month on that, because the customer isn't going to question the price if it's lower than what they just told you."

At least not until the next time they order the same special, and the price is the correct $9.99.

"We've had operators tell us that customers say to them, 'The last time I ordered this, it was $8.99, but now it's $9.99. Why is that?'" said Laura Gaudin, director of sales for Houston-based Revention, a POS software maker. "It's important for customers to pay a consistent price every time they order."

Death of dumb discounts

Tales of lost revenue from incorrect food charges led Revention to add a Smart Coupon feature to its POS software system. Now if a customer presents a coupon for a multitopping pizza but requests fewer toppings than offered, he is charged the correct price automatically.

"If a customer only wants two toppings, the system knows not to discount below $9.99," Gaudin said. "If it exceeds the topping level, it knows to charge more."

Dixon relies heavily on Smart Coupon's other features, like its ability to sort specific coupons and allow their use only at prescribed times and dates.

"If someone orders a large pizza, our system pulls up only the coupons with large pizzas — not every coupon in the system," Dixon said. "You don't have to sit there and hunt though all the ones you don't want to get to the one the customer has.

"You can also program a coupon to show up at specific hours, such as at lunch only. If they try to use the coupon at dinnertime, they can't get it because it's locked out."

Additionally, Gaudin said if a coupon is for a Greek pizza, then an order-taker can't apply it a meat lover's pie unless a manager overrides it. Automating the ordering process as much as possible protects operators' profits, she said.

"The system keeps the user from having to make the decision about what's the right or the wrong coupon," she said. "The system directs them only to those coupons that are available, and that's saving operators a lot of money."

Dixon agreed. "Just on that feature alone, this system would pay for itself in a couple of years."