PIZZA SMARTS

The 1997 Manual / Section 3

Developing Plan

From the PizzaSMARTS Database Marketing Manual, updated January 1, 1997. Download the full PDF.

On this page
  1. Competitor Extermination Program
  2. Marketing Strategies to Consider
  3. Two Entirely Different Strategies
  4. Don’t Let Your Lost Customers Get Away (C-Rescue)
  5. New Customer Treatment
  6. Marketing Plan Questionnaire
  7. Campaign Development Kit
  8. Developing Your Marketing Budget
  9. Step 1: Estimating the Cost of Using Each Marketing Tool
  10. Step 2: Determining Your Marketing Budget
  11. Summary Table

COMPETITOR
EXTERMINATION
PROGRAM

Do you have a competitor that you would like to do something about? Here’s a strategy that you may be interested in.

  1. Identify your target competitor. You may already know who this is or a mail survey can determine this information for you.
  2. Determine the battlefield. Just as most of your sales come from the area closest to your store, so do your competitor’s. Mark his primary area of influence on your SMARTS battlemap. The battle will take place in his backyard.
  3. Find out your competitor’s marketing strategy and beat it! Is it price? Is it a particular promotion? Whatever it is that he is doing, you’ll want to give his customers an offer they can’t refuse.
  4. Mail and/or doorhang a very powerful offer only to your non-customers in his area of influence. This will not interfere with your regular customer income flow but will instead concentrate on customers that you don’t have anyway.

Use your MPA ro measure market impact down to the exact postal carrier route.

Noose drawing

With nothing to lose, you can turn your competitor’s bread-and-butter customers into gravy for you.

And other SMARTS™ Marketing Strategies.

Marketing Strategies to Consider

Noose

COMPETITOR EXTERMINATION PROGRAM

Do unto others before they do unto you.
This first strike strategy is not for the squeamish.

REGULAR CUSTOMERS
OR NON-CUSTOMERS?

Two Entirely Different Strategies!
Want to go for the easy sale or the hard sale? Pizza Smarts reports will tell you which strategy is best for you.

Two framed portraits labeled Customer and Non-Customer
Life ring marked C-RESCUE

C-RESCUE

Identify and mail to the customers who have just stopped buying from you. Are they dissatisfied with you, or are they more satisfied with your competitor?

NEW CUSTOMER TREATMENT

Identify and mail to the customers who have just bought from you for the first time. Could they use a refrigerator magnet? A coupon book? How about a thank-you letter from the manager?

Stork in a GreenMail cap delivering a smiling man in a bundle

THE REGULAR CUSTOMER AND THE NON-CUSTOMER

TWO ENTIRELY DIFFERENT STRATEGIES

Framed portrait labeled Customer: a happy man eating pizza

REGULAR CUSTOMER

Regular customer - he’s easy. Save your coupon expense here. These 20% buy 80% of the pizza. Stimulate his pizza purchasing frequency by promoting toppings, nutrition, cola combinations. How about a refrigerator magnet? This usually offers the least expensive way to raise sales.

NON-CUSTOMER

Non-customer - he’s tough. Raising his awareness level of you may only remind him that he doesn’t like you. Design your marketing to get past his defenses. Remember that he has rejected all of your previous marketing attempts - so do something different.

Most people think of sales as the one way to measure the health of a business, but . . sales are really composed of two distinct elements that require an entirely different approach.

Framed portrait labeled Non-Customer: a disdainful man with arms crossed

Since sales are really composed of the number of customers you have times the number of pizzas they buy, you should be trying both to get your present customers to buy more, and to get more new customers. See statistic 22 to see how often your regular customers are buying. Check statistic 10 to see how well you are converting non-customers into customers. Many marketers still use the one-message-fits-all approach hoping to accomplish both goals at the same time. However, since you have the ability to delivery separate messages to these two groups, you have a secret advantage that can give you more influence with both customer groups

When you first start computer marketing, which way should you first try to raise sales?

Determine your monthly customer purchase frequency and your market penetration rate. Start marketing and let your statistical data measure you real impact.

Life ring marked C-RESCUE floating in water

DON’T LET YOUR LOST CUSTOMERS GET AWAY

Each month a lifeline can be thrown to those customers identified as “most likely to secede”. The dollar effectiveness of C-Rescue can be calculated each month by comparing dollar cost with the improved rescue rate.

C-Rescue allows you to do more than just worry about lost customers. C-Rescue provides 4 benefits:

  1. It improves your customer rescue rate.
  2. It provides you with information from your dissatisfied customers.
  3. It identifies non-existent addresses that are a result of entry errors.
  4. Gives the customer the message that you value him as a customer.

C-Rescue gets its name from the SMARTS “C” customer who is the customer that ordered 3 months ago but not again. Your customized and automated C-Rescue system can mail a satisfaction questionnaire to all fading (C) customers each month. The questionnaire can be returned by the fading customer for $2 or $3 off the customers next order, or if he is not interested in buying a pizza, he can drop it in the mail, and it will be returned to you or to the PIZZA SMARTS Business Return System. The questionnaire is mailed first class so that it is more likely to reach its target quickly and so that when it is returned it will have the information needed to correct any address errors contained within the database.

NEW CUSTOMER TREATMENT

Now you can give your new “first-time” customers the special attention they need to make sure they come back a second time.

Stork in a GreenMail cap delivering a smiling man in a bundle

There are two kinds of new customers: Former customers who have come back after a long absence, and a smaller but very critical group identified as new “first-time” customers. See statistic 13 on your customer activity report to see how many new customers you’ve received during the last month. See statistic 21 to see how well you retain these customers.

SMARTS research shows that “first-time” customers are not as likely or order again as are the other customer groups. Because this group is critical to the continuing growth of your business, and because they are always tougher to keep, it is worth employing one or more of the strategies listed below.

1) When your POS system identifies that you have just taken an order for a new customer, deliver a pre-packaged new customer welcome package. This can be a small pizza box with a ribbon around it that contains a store magnet, menu, a free movie rental or a gift from a co-operating business, and a welcome letter from the manager. A card or letter should go with it with the first name of the customer written on it.

2) A new customer kit can be mailed at the end of the month to all new customers that have been identified during the last 30 days. SMARTS can suggest a standard New Customer Welcome Kit coupon book that explains all of the things that a new customer should know about your business. The most important features are highlighted by coupons in order to create a purchase pattern that will convert this candidate into a good customer.

Marketing Plan Questionnaire


Store

Date

(1) What main strategy(s) would you like to employ in your 6-month marketing plan?

Fourteen Basic Strategies:

  1. Increase purchases among regular customers.
  2. Recruit new customers.
  3. Recruit employees.
  4. Recapture lost (D) customers.
  5. Rescue fading (C) customers.
  6. Increase lunch sales.
  7. Special promotion
  8. Increase out-of-the-area carry-out sales.
  9. Increase sales within specific mail zones.
  10. Sell the idea of delivery.
  11. Promote different menu items.
  12. Create excitement with customer contests
  13. Build mass awareness quickly with grand opening style blitz.
  14. Conduct marketing research to answer specific marketing questions.

(2) For planning purposes, how much would you like to budget for monthly database marketing?

(3) What type of things do you want to see in your marketing campaign?

(4) Is the store primarily residential, campus or military?

(5) What percentage of business come from Business/residential customers?

Business %    Residential %

(6) How long has this store been open?

(7) Is it open for lunch?

(8) What kind of things have you done previously that have worked?

(9) What kind of things have you done previously that have not worked?

Campaign Development Kit

The benefits of a long-term marketing plan cannot be overstated. Your costs will be lower, your mails will be on schedule, and your marketing message will be more relevant to your customer.

Step 1:
Estimating the cost of using each marketing tool
Step 2:
Determing your marketing budget
Step 3:
Scheduling your marketing events.
Step 4:
Determining message and producing creative material.

Developing Your Marketing Budget

There are at least three ways to set your Pizza Smarts marketing budget. Consider these three approaches below:

PLAN A (Basic Monthly Mailing Program)

  1. Mail current customers every other month. Earn customer loyalty, increase purchase frequency, and reduce customer defections by establishing an ongoing line of communication with your regular customers. Use a different selling approach each moth. Emphasizes variety one month, delivery and service another. Other monthly mailings could highlight product quality, premium offers, price discounts, monthly promotion, or a simple reminder. Remember only 7% of your delivery area accounts for 40% of your sales. You can afford to keep in touch with your relatively small customer base.
  2. Mail fading (C) customers every month. Your C-Rescue mail piece will reach unhappy customers and breath new life into ho-hum customers. If you do this every month, you will always have the last word with your fading customers.
  3. Mail first-time customers every month. Improve the chance of winning over the very important “first-time customers.” Your “First-time Customer” mailing will give the unimpressed first-time customer new reasons to give you a second chance. The impressed customer will use the coupons provided to establish a long-term buying habit.
  4. Mail to 1/3 or 1/2 of your non-customers every month. Mailing to non-customers helps to increase your store sales by expanding the size of your customer base. With all the new customers you’ll be getting as a result of a stronger non-customer mailing, you’ll want your operations to be at their best. Instead of mailing all of your non-customers once a quarter, get the same result by mailing to 1/4 or 1/3 or your non-customers every month. This will allow you to give better service to your customers by spreading out the load on your store operations. It also spreads out your marketing expenditures.

PLAN B (Fixed Monthly Budget Determines Mailing Program)

This budget approach uses the same marketing elements as Plan A but differs because the budget is set first, and then a plan is designed based on the budget. Your report will suggest which marketing strategies will yield the most cost-effective results. A marketing plan will utilize the highest return strategies first and continue until the remaining budget dollars are used. A minimum of 2% of your stores’ sales should be spent on database marketing if you are to take real advantage of this marketing technology.

PLAN C (Customized Plan)

Step 1: Estimating the Cost of Using Each Marketing Tool

Marketing Tool Chest

Estimate, in cents, the cost of Printing, Posting, and Mailing costs associated with each Tool.

Marketing Targets

Enter the number of Customers, Non-customers, 1st Time Customers, and Fading Cust. from MQR Report

Marketing
Tool		Cost: Cents per pieceCustomersNon-Cust.1st TimeFadingAll Cust.
PrintingPostageMailingTotal149936192252255118
1New Customer Kit15.012.55.032.5$487$1,176$73$73$1,663
2Customer Rescue10.012.55.027.5$412$995$62$62$1,407
3Postcard3.012.55.020.5$307$742$46$46$1,049
42 Perf Coupon Card4.012.55.021.5$322$778$48$48$1,100
5Custom Jumbo Card5.012.55.022.5$337$814$51$51$1,152
6Envelope with Letter12.012.55.029.5$442$1,068$66$66$1,510
7Coupon Book13.012.55.030.5$457$1,104$69$69$1,561
8Magnet Mailing32.012.55.049.5$742$1,791$111$111$2,533
9Fake Newspaper25.012.55.042.5$637$1,538$96$96$2,175
10Message in Bottle48.055.05.0108.0$1,619$3,909$243$243$5,527
11Doorhanger4.06.05.015.0$225$543$34$34$768
124 color slick sheet9.012.55.026.5$397$959$60$60$1,356
13Idea A10.012.55.027.5$412$995$62$62$1,407
14Idea B50.012.55.067.5$1,012$2,443$152$152$3,455
15Idea C20.012.55.037.5$562$1,357$84$84$1,919
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Hit Table

Step 2: Determining Your Marketing Budget

Enter this data to determine your Budget:
Your average weekly Sales ($)?4000
% of Sales for SMARTS Mktg?3.2%
Weeks this budget will cover?52
Marketing Targets
Select the number of full, half, & 1/3 hits of each tool to use during the budget period. Add & subtract hits till your Scheduled Total approximates your Budget Total.
Total Cost$6,654
Amount of Budget$6,656
Variance$2
Marketing
Tools		CustomersNon-Cust.1st TimeFadingAll TargetsTOTAL
COST
149936192252255118
Cost per Piece in centsFullhalf1/3Fullhalf1/3Fullhalf1/3Fullhalf1/3Fullhalf1/3
1New Customer Kit32.5
2Customer Rescue27.5
3Postcard20.5121$2,162
42 Perf Coupon Card21.51$322
5Custom Jumbo Card22.5
6Envelope with Letter29.51$442
7Coupon Book30.511$1,009
8Magnet Mailing49.511$111
9Fake Newspaper42.51111$2,271
10Message in Bottle108.011$243
11Doorhanger15.011$34
124 color slick sheet26.511$60
13Idea A27.5
14Idea B67.5
15Idea C37.5
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Total $$2,166$3,945$272$272$6,654

Sum Table

Summary Table

Marketing
Tools		CustomersNon-Cust.1st TimeFadingAll TargetsTOTAL
COST
149936192252255118
Cost per Piece in centsFullhalf1/3Fullhalf1/3Fullhalf1/3Fullhalf1/3Fullhalf1/3
1New Customer Kit32.5
2Customer Rescue27.5
3Postcard20.53071484371$2,162
42 Perf Coupon Card21.5322$322
5Custom Jumbo Card22.5
6Envelope with Letter29.5442$442
7Coupon Book30.5457552$1,009
8Magnet Mailing49.55656$111
9Fake Newspaper42.563715384848$2,271
10Message in Bottle108.0122122$243
11Doorhanger15.01717$34
124 color slick sheet26.53030$60
13Idea A27.5
14Idea B67.5
15Idea C37.5
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TOTAL HITS$2,166$3,945$272$272$6,654