Friday, May 10, 2013
The Pizza Coupon Conundrum
As for which couponing strategies work best, no one seems to know the answer to that one. You could ask 100 pizzeria operators and they'd all give a different answer. I have often heard that offering something for free is usually very successful (free breadsticks, free soda, etc.). Everyone loves to get something for free, and these items generally cost you very little to give away.
The one big requirement of couponing is that you must track what happens with the coupons. If you aren't monitoring how they are being redeemed, you'll never know if the campaign is beneficial or not.
I wondered what The Pizza Insider Blog Advisory Board members thought about couponing in pizzerias, so I asked for some of their opinions.
"Coupons are the crack cocaine of pizza marketing. Instant high, then a crash as the junk traffic they attract wait for the next discount. That said,here’s what you should know: The dashed border of the coupon does the heavy lifting more than the actual price. I sold just as many 3-topping pizzas off a $12.99 (regular menu price) coupon as I did at $9.99. Go figure. Rather than move a $15 pizza down to $9.99, try wrapping the same pizza in a coupon with a FREE 2-liter at $14.99." --Kamron Karington, Repeat Returns
"Discounts might give me an excuse to check out a new pizzeria, but if I always have a coupon, I'll get used to the discount. Be careful with how you value (or devalue) your product." --Scott Wiener, Scott's Pizza Tours
"There's way too much couponing going on; let’s stop it. The customer who comes in every week and buys a certain kind of product like clockwork should never get a discount promotion for that product. If anything, he should be segmented and given incentive to buy what he does not now buy, or come twice a week, with incentive only redeemable with second purchase in the same week. Discounting of any sort is dangerous and wasteful when it is universally or randomly applied. Discounting structured to force a specific behavior at a specific time, that will increase frequency of purchase, or expand purchase activity beyond the customer’s established pattern, can be very profitable." --Tom Feltenstein, Power Marketing Academy
"Consider that when you start, it's tough to stop. I like the slow night discount of a standard large pepperoni pizza that's normally $10 for $5 plus a drink on say a Tuesday. People start to expect it." --Mike Rasmussen, Rasmussen Tax Group
"I think couponing is great for pizzerias. It's really split down the middle here in Chicago, with many of the independents not participating, and many participating lightly (my guess is honestly 50/50 and I don't take into account Dominos or Papa John's)." --Jonathan Porter, Chicago Pizza Tours
"Couponing must be used judiciously or it becomes a permanent subsidy that can reduce the perception of value to your guest." --John Arena, Metro Pizza
"Couponing makes sense when it leads to bigger profits. The beauty of it is that you can measure the results to see if it works. The size of the discount can be determined by testing different offers. Couponing randomly should produce better results than doing it on a regular basis. Research shows that people respond better when they think the offer is a one time event vs. something that they can always expect." --Jay Siff, Moving Targets
What's your opinion? Do you use coupons? Do they work? Let us know in the comments section
My goal at The Pizza Insider is to give you the inside scoop on the latest trends, marketing tactics and technology so that you're always one step ahead of the competition! I've been a part of the pizza industry since 2007, first as the editor-in-chief, and now as the editor-at-large at PMQ Pizza Magazine. My first pizza book, Pizza: A Slice of American History, was just released; find out more here.