Author Topic: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!  (Read 4496 times)

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Offline 216.chris

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We opened the doors to our pizza place, Pizza Amore, about 3 months ago and have gotten great reviews about our products we offer. We make our dough from scratch from our own recipe that was about 4 months in the making. Anyway, we noticed that since school has been in session our Mon-Wed sales are almost diminishing and our Thurs - Sunday sales are not picking up very much. Is this type of trend normal to experience? Our food costs are around 23% - 27%, we have low rent and utility bills which puts our profit margin around 50% - 60% depending on the week. Is it typical for a pizza place to make around $5,000 a month starting out? Is there anything we can do to step up sales? We haven't really spent much on advertising because we do not have a budget for that yet. We have had a rented sign up front letting people know we are here, as well as just put some mailer coupons that will be mailed at the end of the month to about 17,000 people in the immediate area. Should this help sales? Most of our advertising has been done via social media and word of mouth but it doesn't seem like the business is actually growing. Is it too soon to tell? Any opinions or advice will be greatly appreciated. Pizza in the immediate area around us consists of a Howies and a Ceasers (Located in the Kmart across the street). There are also two schools within 5 miles, and a ton of apartment buildings. Any ideas?

Pics are of some of our products as well as our location and menu.


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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #1 on: October 03, 2013, 12:27:47 PM »
Chris,

In parallel with your post here, you might want to register and post your questions over at the PMQ Think Tank, at http://thinktank.pmq.com/viewforum.php?f=6, that is visited mostly by professionals. I have seen the types of questions you have raised here many times at the PMQTT. The posting volume at the PMQTT isn't as high as at this forum but you can also search the archives of the PMQTT. There is also an FAQ list at http://thinktank.pmq.com/viewtopic.php?f=6&t=3374&sid=fabfccc88b70c2b71458f4e40f0e61bc that, while dated, does include a lot of useful information.

Peter

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #2 on: October 03, 2013, 12:34:42 PM »
Thanks for the reply Peter, I'll try posting there as well.  :)

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #3 on: October 03, 2013, 12:42:51 PM »
Where are your phone pics coming from? I looked on Yelp and Facebook for reviews and stuff after googling "pizza amore saginaw," and all I found was nothing on Facebook and one Yelp review. If you direct me where to look, I'll try to help you out. Let me see your bad reviews.

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #4 on: October 03, 2013, 12:56:18 PM »
OK, the Facebook page came up on the "About" page. I needed to choose the Timeline from the menu to see more stuff. Gonna look at it right now.

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #5 on: October 03, 2013, 01:06:45 PM »
Here's one thing I've noticed already: Your prices are very low; probably too low; probably way too low.

There are at least two potential problems with that: 1) You're trying to compete with the big chains, which is just not gonna happen. 2) A lot of people won't even consider trying an independent pizzeria with low prices because they assume it's cheap quality crap. I don't know if it is or not. But I do know if they want cheap, crappy pizza, they'll get it from a place they've known their entire lives.

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #6 on: October 03, 2013, 01:22:07 PM »
From Facebook: "Liked, how do I get my 10 % off... 8)"

It sure looks like you're doing everything possible to appeal to people who want cheap pizza. If you continue to do that, it's gonna put you out of business. These people will only come back when your pizza is cheaper than everyone else's pizza.

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #7 on: October 03, 2013, 01:41:22 PM »
Thank you Aimless Ryan. We are very new to the business and do not want to compete with National Chains we just happen to live in a very blue collar area. The only area that I would consider not low income in this area is the country club about a 1\2 mile down the road. Would you say that higher prices could actually increase our sales volume? If so, what would be a good way to transition into a higher price without potentially driving away customers that we already have? We have had outstanding reviews about the pizza we offer and have actually not gotten one bad review about it. The only problem we seem to be having is getting people in to give it a try. We have had a small handful of people actually look at our menu and say that our pizza is actually "expensive" and not order. But, I would say about 90% of the people that have came in returned very shortly for more pizza and have now became more of a regular here. Would an overhaul on the menu and prices increase the sales? Same product just maybe more topping choices or even fresher ingredients mixed with a higher price tag per item to increase sales and profits? I believe that the cheaper price does appeal to some people in the area because there are a lot of low income families in the immediate area, but there is also a country club down the road. Should the general population be taken into consideration or should we focus more on the high end customers at the country club who may actually be willing to pay more to support a local business and a better quality pizza? Or, in general do most people prefer quality over price? Right now we are offering a high quality pizza and a very cheap price. Our profit margins are quite slim but we figured mixing low cost with high quality would actually benefit us. Is this the wrong idea?

Offline scott123

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #8 on: October 03, 2013, 01:54:17 PM »
Ryan, respectfully, I don't see suburban consumers associating low quality pizza with a low price.  Pizza is, by it's nature, inexpensive.  This economical aspect has allowed it to not only be be recession proof, but recession friendly. When everything hit the fan in 2008, the restaurants were the hardest hit.  Even though everyone stopped going to restaurants, they generally didn't go into their kitchens to cook, so that pushed all the demand into cheap prepared food.  Fast food is making record breaking profits, as is frozen food. I'm not saying that pizza is in the same realm of quality as fast and frozen food, but, the same kind of thrift based buying decision engine that's driving massive inexpensive prepared food sales is also highly favoring pizza.  In a suburban market, in this economy, if you try to appeal to a 'you get what you pay for' mentality and charge a premium rate, you will be perceived as a restaurant and you'll be dead in the water.

Right now, it's critical to be perceived as the best value- the best pizza for the least amount of money.

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #9 on: October 03, 2013, 02:31:58 PM »
scott123, Do you think that more variety on the menu may bring in more business? Maybe adding Nachos or Subs and Wings? It is early for us but we believe that our sales should be higher than they are right now. Typically how long does it usually take for business to increase in this industry? Are there any other ideas that anyone may have for increasing volume of customers in a blue collar area like this?


Offline scott123

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #10 on: October 03, 2013, 02:52:42 PM »
Chris, if your retention is truly that high and your feedback that glowing, then your sales shouldn't be plateauing.   It's not a response that makes me a lot of friends, but when people ask how to sell more pizza, I always tell them to make better pizza.  If you're surrounded by successful chains (and I have no doubt that Howies and Caesars are selling massive quantities of pizza), then you have to strive for more than great reviews.  You need to make a pizza that will blow people's minds- that will have them leaving your pizzeria and shouting your name to the rooftops.  You know the bible story of Saul transforming into Paul on the road to Damascus?  That's the kind of transformation your customers should be experiencing. When they bite into your pizza, they should be struck down by a blinding white light. They should walk into your place blind and leave with their sight restored  ;D

I'm kind of joking, but I'm kind of not.  Are you 100% certain that your pizza is blowing Hungry Howies out of the water? I'm not saying it doesn't, but I've never met anyone, who, on their own, developed a life altering dough in 4 months. Are you certain that your pizza differentiates itself enough from your competitors?  When I pulled up a photo of Hungry Howies, cosmetically speaking, it looks a little similar to yours. I'm also concerned that you're both doing 'flavored crusts.'  I'm pretty sure they don't hand toss, so that's different, but I don't think a hand toss is enough to set you apart as much as you might want to be, and, in your market, uniqueness may not be a bad goal.

I might be wrong about the need to differentiate yourself. You know your market area better than I do.  Generally speaking, though, I have found that in areas where the chains have a strong foothold, it's important to distance your product- because you really can't compete if you're selling something similar.

3 months isn't a lot of time.  You may very well be selling an amazing product and it's just a matter of giving it some more time for people to find you.  It can never hurt though, to take a look at the pizza your selling and figure out ways of improving it- no matter who you are.

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #11 on: October 03, 2013, 03:01:34 PM »
Thank you Aimless Ryan. We are very new to the business and do not want to compete with National Chains we just happen to live in a very blue collar area. The only area that I would consider not low income in this area is the country club about a 1\2 mile down the road. Would you say that higher prices could actually increase our sales volume? If so, what would be a good way to transition into a higher price without potentially driving away customers that we already have? We have had outstanding reviews about the pizza we offer and have actually not gotten one bad review about it. The only problem we seem to be having is getting people in to give it a try. We have had a small handful of people actually look at our menu and say that our pizza is actually "expensive" and not order. But, I would say about 90% of the people that have came in returned very shortly for more pizza and have now became more of a regular here. Would an overhaul on the menu and prices increase the sales? Same product just maybe more topping choices or even fresher ingredients mixed with a higher price tag per item to increase sales and profits? I believe that the cheaper price does appeal to some people in the area because there are a lot of low income families in the immediate area, but there is also a country club down the road. Should the general population be taken into consideration or should we focus more on the high end customers at the country club who may actually be willing to pay more to support a local business and a better quality pizza? Or, in general do most people prefer quality over price? Right now we are offering a high quality pizza and a very cheap price. Our profit margins are quite slim but we figured mixing low cost with high quality would actually benefit us. Is this the wrong idea?

With you being in Michigan, I figured there was a good chance that there might not be much money going around. I'm not even gonna try to pretend I know anything about your market, because I don't. But I'll be glad to throw out ideas that may help.

One thing I wondered: Were you extremely busy right after the place opened, followed by a significant drop in sales, not correlating with back-to-school?

I don't want to say that raising your prices would help, but I think it probably would help if you were almost anywhere else in the United States, as long as your product is worthy of the price. I mean, when I look at your menu, all I see is CHEAP PIZZA!!! Like Domino's, I suppose. Except I already know what to expect from Domino's. If I go to Domino's, I know my pizza will be just like the last Domino's pizza I had. So if I've never been to Pizza Amore, I don't know if I'd be willing to try Pizza Amore, because I already know what I can get for the same price elsewhere, and I like what I get elsewhere.

You said it yourself: Your problem is getting people to try your pizza. People who try it rave about it, then they come back. So if your pizza is really cheap (as it is in my mind), yet not a lot of people are trying it, what does that tell you? (It tells me cheap prices aren't the answer.)

Tell me why I should try your pizza instead of my usual favorite. Give me a good reason. I'm already happy with my usual favorite, so if you want my business, you have to give me a good reason to try your pizza instead of my usual favorite. Especially since you're the new guy. Low pricing is not doing the job. (I don't know how anyone could have looked at your menu and said it was expensive. Wow.)

Just remember this: To people without much money or income, a night out for better-than-average, higher-priced pizza is an event. That kind of event doesn't happen at Domino's or Papa John's. Pizza Hut, maybe, but just because they have a dining room. Can you provide that kind of night out for people? If you can, then they will become your customers as soon as you give them a good reason to try Pizza Amore.

Don't worry too much about the country club folks down the street. If you even set foot in their neighborhood to distribute doorhangers or anything like that, they'll probably call the cops on you. (It's happened to me, in Manhattan Beach, CA.) If the rich folks want to be your customers, treat them like you should treat every customer, but just be aware that they will probably never constitute your primary target market.

Offline scott123

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #12 on: October 03, 2013, 03:11:17 PM »
Re; getting customers to try your pizza.  While I generally try to dissuade people from putting a lot of money into advertising, I think, depending on the market, mailers can be effective- especially in getting your name out and getting people to try your pizza.

What coupons did you put in the mailer?  If you have good retention and it's just a matter of getting people to try the pizza, then you should be offering a great coupon in the mailer- maybe not pizza at cost, but definitely better than 10% off or $1 to $2 off a large pie.

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #13 on: October 03, 2013, 03:29:27 PM »
If I was you, I'd go walking around your nearby neighborhoods with fliers and doorhangers that contain coupons (which offer deals, not discounts), as well as compelling rhetorical reasons for why prospective customers should become loyal customers. Not only does this give you a chance to get your name out there, but it also gives you a chance to talk to prospective customers and let them see your enthusiasm for your pizza. A piece of paper will never do what a face-to-face conversation can do.

In fact, I might drive up there, try your pizza anonymously, and do this for you, if your pizza and service are what I consider worth buying. But just remember that you're not selling pizza; you're sellng an experience. If your pizza is better than any pizza I've ever had, but the service sucks, I won't be back. And then I might be inclined to tell everyone I know how lousy the service was.

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #14 on: October 03, 2013, 03:50:12 PM »
Chris, if your retention is truly that high and your feedback that glowing, then your sales shouldn't be plateauing.   It's not a response that makes me a lot of friends, but when people ask how to sell more pizza, I always tell them to make better pizza.  If you're surrounded by successful chains (and I have no doubt that Howies an....

We actually have people coming in or calling back just to tell us that our pizza is the best that they have had. Few people even mentioned to us that they were so surprised by the quality and the low price that they have been telling everyone they know about how good the product is. I am sure some things could be tweaked to make an even better pizza but there is really a limit on how much you can change a recipe before it isn't even dough anymore and has moved onto something completely different; maybe it could be beneficial...

Thank you for your responses though, it gave us a lot to think about. Maybe we will see how the mailers go and judge from that. With the mailer we are offering a "Buy a 14' cheese get one free" "Free breadsticks with any specialty pizza" and "Buy one calzone get one 50% off". We didnt want to go to over the top with the mailer but at the same time we wanted to give someone a reasonable deal.

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #15 on: October 03, 2013, 03:55:32 PM »
With you being in Michigan, I figured there was a good chance that there might not be much money going around. I'm not even gonna try to pretend I know anything about your market, because I don't. But I'll be glad to throw out ideas that may help.

One thing I wondered: Were you extremely busy right after the place opened, followed by a significant drop in sales, not correlating with back-to-school?

I don't want to say that raising your prices would help, but I think it probably would help if you were almost anywhere else in the United States, as long as your product is worthy of the price. I mean, when I look at your menu, all I see is CHEAP PIZZA!!! Like Domino's, I suppose. Except I already know what to expect from Domino's. If I go to Domino's, I know my pizza will be just like the last Domino's pizza I had. So if I've never been to Pizza Amore, I don't know if I'd be willing to try Pizza Amore.....

You make a very good point. In reality, there is no reason for anyone to stop going to a place they are already happy with. Sure, our pizza is better than what the others offer but getting them to try it and realize it is the trick. Maybe some samples outside the local grocery store or farmers market might help. Then again, maybe it is the price keeping people from trying us. The only downfall to the price change is that while it could make our pizza more appealing to other people it may also slow the "budget buyers" that we are currently getting. I am almost leaning more towards a more diversified menu and maybe even a different style or two of pizza. I think time will tell to be honest. We have had great reviews and a great response from our customers already. And yes, people have actually complained about our prices and walked out and without even trying it. Maybe we could add a few higher priced "premium pizzas" to the menu with a slightly higher price tag while keeping some lower cost pizza options on the menu for the customers we already have. Does this sound reasonable? Maybe all we need is more time for people to try out pizza, but then again maybe there is something wrong with the way we are doing things. Its really hard to say.

Offline scott123

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #16 on: October 03, 2013, 04:02:59 PM »
Thank you for your responses though, it gave us a lot to think about. Maybe we will see how the mailers go and judge from that. With the mailer we are offering a "Buy a 14' cheese get one free" "Free breadsticks with any specialty pizza" and "Buy one calzone get one 50% off". We didnt want to go to over the top with the mailer but at the same time we wanted to give someone a reasonable deal.

If you doing a buy one get one free deal, that's selling your pizza at cost, which is a really great deal, but... it also forces new customers to commit to two pies to try your product.  If you're willing to sell pizza at cost just to get initial customers in the door, then you might want to consider something along the lines of an introductory $4 14" pie (take out only).  That should expose considerably more people to your pizza than a buy one get one free offer.  Not only is it a smaller financial risk for perspective customers to take, but it's been thoroughly proven that ads are more effective that give prices.

Offline 216.chris

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #17 on: October 03, 2013, 04:44:33 PM »
I was playing around with the pizza trying to give it a little different appearance that what everyone else serves (Dominos or Ceasers). Maybe that slight variation could be appealing to more people and in return bring them in?

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #18 on: October 03, 2013, 06:48:33 PM »
I was playing around with the pizza trying to give it a little different appearance that what everyone else serves (Dominos or Ceasers). Maybe that slight variation could be appealing to more people and in return bring them in?

Just from the lateral slice view I am a bit concerned about your dough.  The bubbles on the crumb look very tight to me, and the crust is pretty thick towards the rim.  To me, for a really mind-blowing pizza of the type Scott is talking about, you will probably want a more irregular hole structure. At least that's true in my experience.  I know you're not here for advice on your recipe but I just thought I would point that out. 

I do totally admire you for jumping in there and opening a pizza place. 

Offline Aimless Ryan

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Re: New Pizza Place In Saginaw, MI. Business Trends, Advertising, Help!
« Reply #19 on: October 03, 2013, 06:50:01 PM »
The more I see and read, the more I think you really need to raise your prices... considerably. $9.99 for a 16" pizza is already a huge discount (unless the pizza comes from Domino's). If your pizza is any good--and those pics make me think it probably is--you're already giving people at least a few bucks off of every single pizza they buy. With that kind of pricing, you're just giving away money, and you're also telling everyone that your pizza is cheap. If you sell 100 pizzas a day with that kind of pricing, you're giving away $300. Every day. That's $9,000 every month and $108,000 a year. Just giving it away.

You can't stay in business if you just give away $100,000 a year. Many independents barely make that much in gross sales every year (which is a whole other conversation).

My guess is that you're not selling anywhere near 100 pizzas a day. You should be.

I went to a nearby pizza joint with my folks a year or so ago. Even though I used to deliver pizza in the same area this pizza joint serves, I didn't know much about Grandstand Pizza. In fact, I really didn't even want to go there. My impression, especially after seeing the menu (and the low prices), was that they served cheap pizza. If I was a regular pizza consumer, I wouldn't have ever ordered from them. So imagine my surprise when it turned out that their pizza is actually pretty good. It could use some work, but it was considerably better than I ever would have imagined.

I'm guessing a lot of people see Pizza Amore the same way I saw Grandstand Pizza. You have to figure out how to make them see it in a different way.

I suspect that starts with raising the prices enough to allow you to stay in business. If you raise your prices, most of your customers will understand, because your prices are ridiculously low. And the new customers you will have gained just by raising the prices won't even know you raised the prices, because right now they don't even know you exist. They don't know you exist because they don't care that you exist. They don't care that you exist because they've probably seen your prices and dismissed you as just another vendor of cheap, crappy pizza.

With higher regular prices, you can still offer really good deals. If your Mondays, Tuesdays, and Wednesdays are significantly slower than every other day, you can offer a really kick-ass Monday special, Tuesday Special, and/or a Wednesday special.

For example: Monday Night Special: $9.99 for a 14" 1-topping pizza.

Or $19.95 for two 14" 1-topping pizzas.

That seems like a couple pretty damn good deals, because they are good deals. But it's higher than your current regular price. I could come up with a whole bunch of these specials, and explain why they'd be better than $1 off or $2 off, especially considering your pizza is already at least $3 cheaper than it should be.

WEDNESDAY IS KIDS' NIGHT!!! Kids eat free (or something like that). You might have to offer a personal size for this. If you give away a 6" or 7" for every kid that brings their parents into your pizzeria, you make money. By giving away $1 or $2 worth of pizza, you end up selling at least another 14" pizza plus at least a couple drinks, on average. And even though it's similar to $1 off or $2 off, it's nothing like $1 off or $2 off.

With a kids' night, kids choose where the family eats. Marketing to kids is one of the best ways to stay in business. You have to think like a dope dealer. Give them a taste every now and then. If you do, most of those kids will grow up to become loyal paying customers. You make the rules, which are totally reasonable to the kids and the parents, and they accept the rules because the rules are favorable to them. In the process of creating lifetime customers (the kids), you've also made their parents loyal customers, who will remain loyal customers. (This is all assuming you have a dining room.)

Man, I could go on a long time.
« Last Edit: October 03, 2013, 07:09:55 PM by Aimless Ryan »