Padrones Pizza East: Do any of you use coupons and, if so, what kind of percentage discount do you offer?
brad randall: We call our bundle the Crazy Aver’s Deal. It used to be called the Crazy 8 Deal back when our competitor called theirs the Big 10 Bargain. Ours was $8, and theirs was $10. Pretty clever, except inflation makes sticking to a price difficult. The Crazy Aver’s Deal is $12.99 with no mention of the price in the name. So my suggestion from experience is to not tie yourself to or brand your deal with a price. Set a discount/price you can live with and raise it a little bit every year.
Royster 13: More aggressive marketing can sometimes work better than coupons. If you’re doing $1,000 a day in gross sales but giving away $150 to $200 in coupons, you only net $800 to $850. But if you spend some of that loss from coupons on more marketing each day, you may increase your net profit. However, all marketing requires testing and tweaking until you find the “sweet spot.”
bodegahwy: We don’t offer coupons with a percentage discount. We have three types of coupons: 1) Value added—order this and get that for free or half-price, such as buy a 16” pizza and get a free pint of ice cream; 2) set discount—save $5 when you order two 16” pizzas; or 3) promotional price—buy a 14” pizza with one topping for $11.
Stop thinking of coupons as money you give away. They aren’t. If you’re going to use coupons (and there’s a good reason why most pizza places do), you need to build the offer into your price structure. Then start looking at whom they attract and what they produce.
Freddy_Krugerrand: We run coupons, but they are only good Sunday through Thursday. This way, we can offer more aggressive deals during slower days and not worry about coupon users taking up valuable table space on Friday and Saturday.
Warren: I agree with bodegahwy that coupons need to be built into your pricing structure. The real downside of coupons lies with people who would have paid $14.99 for a large pepperoni but buy it with a coupon for $9.99 instead. That’s why having a POS system—and being able to direct-mail to your customer database by last date of order—is so important. If Tommy orders a large pepperoni for $14.99 once a month, you can mail him a coupon for a free order of cheese bread or a two-liter drink if he orders in the next week. This gets an extra order from him at a high margin. If Suzie orders once every three months, you can afford to offer her a better deal to get her to order once a month.
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