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On a recent trip to California, I was tipped off about a new pizzeria in Moreno Valley Ranch called Big Guys Pizza & Pasta. They opened back in November, so I didn't think there would be too much to the story, but after setting up an interview and sitting down to talk with Sean Gargan and Dylan Baker, I soon discovered that these guys had some great ideas for opening a new location.
They did their homework beforehand and
offer some great tips on opening a new restaurant, online ordering, catering and
marketing. I also made a surprise discovery in talking to them about a company
called Restaurant Alliance that is helping pizzeria operators learn more about
marketing and programs that are out there and available.
The Concept and Location
Scouting
Dylan and Sean really put some thought
into what type of pizzeria they wanted and where they would open it. "Both Dylan
and I used to work in a pizzeria owned by Dave Bobbe called Boompas," Sean said.
"He sold his place, and we decided we wanted to open our own restaurant. We
started by scouting out locations. Someone mentioned Moreno Valley, but I didn't
think too much about it until we drove out here.
"All I could see
was construction, a shopping center and industrial complexes, so I started
checking out the demographics with City Hall. I also contacted a Blockbuster
video store and they shared some info. From this information I found out how
many houses were here, about future construction and average incomes, which
showed that it was an affluent area. The data showed that the area was going to
double, so we chose this as our spot after several months of location scouting."
The Pains of
Opening
While listening to them talk about opening,
I asked if there were any lessons they could share about opening a new location.
"Oh yeah, we learned some hard lessons," both said in unison. "The first thing
we learned was everything was $5,000," Dylan said laughingly. "It was either
$5,000 or multiples of $5,000. I guess what I am trying to say is be prepared to
spend money if you want it done right. I would also suggest leaving things in
the hands of the contractor, but be on-site everyday. We tried to subcontract
some things out, but that turned out to be a bigger pain than it was worth. Let
them do what they do, but be there to let them know when something isn't the way
you want it."
Sean added, "We also learned that there are a lot of
hidden costs. We were told that licenses were going to be so much, but found out
there were extra fees involved in actually obtaining them. I suggest having a
budget and plan on at least half that in overruns. One thing that happened was
we agreed on a date we would start paying rent, but we went five months over
that and were paying rent for three months when we weren't even
open."
The Launch of Big
Guys
"One thing that really helped in opening was
actually being on-site," Dylan said. "People would come up and ask us about the
concept, so it gave us a chance to explain what we were about. We also talked to
the businesses around us, which led to orders from them when we opened. Kids
would come up asking for jobs before we were open, so our labor pool was already
started without having to advertise for it."
"Before opening, we
were contacted by Monty Lockyear, Director of Sales and Marketing for Vistar,
who wanted to use us as a test market for some programs they were launching,"
Sean said. "They put us in touch with Mani Sidhu of CoolOrder to set up online
ordering, Mike Rasmussen, CPA with Franchise Tax Group to help with the books
and tracking and Mark Sibilia of MyPizzaPromo for creating the print program and
direct mail. We started doing mail drops prior to opening to get interest up,
but because we were late opening, it started a little sooner than we expected.
We did two drops a month of 5,000 each for about a month and a half before the
doors opened. They looked real nice and I believe they worked. Next time, we
will design in special orders that are exclusive to the mail drops so we can
track their effectiveness better."
The Numbers
"Still, out of the gate
we were doing great and did over $15,000 in the first two weeks of business,"
Sean said. "By the end of our first complete month we were over $60,000 and have
been seeing increases each month." Currently, Big Guys is doing about $64,000 in
sales per month. Takeout and delivery make up 70 percent of their business,
while dine-in is about 30 percent."
No-Peek Promotion
ne of their
promotions that has shown the best response is a No-Peek offer they did in
January. "Monty came to us with this idea," Sean said. "We distributed No-Peek
envelopes to 100 new customers who came in the store during the last two weeks
of January. They had instructions to bring them back unopened in February to see
what prize they had won. If the envelope was opened, the offer was void. Inside,
we had free pizzas, breadsticks, sodas and discounts. We got back 94 of 100.
Seven of the 94 had been opened, so they were not given the offer inside. This
is a fun promotion that had a huge redemption rate, and we will be doing it
again."
Offices and
Hospitals
"We knew from our scouting that there was
a lot of untapped business with the warehouses and hospitals," Sean said. "We
specifically targeted the hospitals. I went in with our menus and some fliers
and distributed them to the nurse's stations, around the emergency room and with
receptionists. None of the material really offered discounts, they just let them
know who we were and what we offered. We did this with some of the warehouses
and industries, too. It turned out to be a good move, and now we get a lot of
orders, especially from the hospital emergency rooms. A couple of the industrial
locations have contacted us about doing some catered events."
Catering
One of the new ideas they
told me about concerning catering was how they contacted a local wedding planner
and offered to work with him. "We are trying to work with more wedding planners
and florists because they are asked about catering while talking to clients,"
Sean said. "For weddings, we do nicer stuff. Anything they request, we can make
it. A lot of the time, people just want pastas, but we also offer packages with
pizza and salads. We price it per person and the price depends on if they pick
it up, if we have to deliver and if they want plates and utensils."
School
Promotions
A school group looking for assistance
with a fundraiser approaches everyone with a restaurant, especially a pizzeria,
at some point. "Many times they want money," Sean said. "Rather than give them
cash, we talked with the Restaurant Alliance group and decided to create a
coupon card instead. The coupon card has 10 offers with about $100 in value
discounts on it. The school can sell them for $10 each. If they sell 20 cards or
more, they make more than if we just give them cash. It also serves as
advertising, and in many cases the card's value is not completely redeemed.
Since there aren't many sports events going on right now, we are negotiating
with the schools for banners in gyms and on athletic fields in return for making
a contribution."
Shopping Guide
Advertising
ne way Big Guys spent
advertising money wisely was with a $300 ad in a local shopping guide. The guide
was distributed to every home in the area and had three offers. One was for two
medium pizzas for $12.99, one was for two large pizzas for $16.99 and one was a
misprint that offered a pizza deal that was only 50 cents cheaper than the menu
price. "This was a good decision for two reasons," Dylan said. "First, it was
distributed to everyone. We did get sales from it, too. The second reason it was
good was because the mistake showed us you don't always have to have a major
discount to draw people in. If you just advertise a ‘special' people will come
as long as they feel they are getting something. People like coupons even if it
isn't a big discount."
Online Ordering and
Email Marketing
During the dot-com boom,
every one thought online ordering was going to be the next big thing, but it
never materialized. One might argue that the reason for its failure was the
insane charges many online ordering companies charged. Would you make an order
online if it was going to cost you an extra $5.95 or extra 10 percent? I think
one contributing factor may have been over-pricing by the software companies at
that time in learning a new market. Another reason was probably because at that
time, few, if any, had constant Internet access. You had to go dial-up and wait
for the pages to load. Times are changing. In the past 12 to 18 months, DSL,
cable Internet and cheaper extra phone lines have put more people online at all
hours. Many are using the Internet to view menus, but high charges are still a
deterrent. Through Restaurant Alliance, Big Guys found not only an affordable
online ordering solution, but also discovered much higher ticket averages for
online orders.
"Monty turned us on to a company called
CoolOrder.com," Dylan said. "We didn't, and still don't have our own web site,
but they designed a page on their site. The great thing about this is it's
hands-off for us. All we do is collect the orders from the fax machine and make
pizzas. The only thing we have done is put a fishbowl out to collect business
cards and email addresses. We hand them over to Mani at CoolOrder, and he puts
them in to our email lists. About once a week, he sends out an email blast and
the orders come in. We have a small logo on our menus, but really don't push it
too much and the orders are still there. The interesting thing we have seen is
that online orders average $8.46 higher than our other ticket averages, which
average $14.75. We've received 66 online orders at an average of $23.21 per
order. That's very cool. Of those online orders, 60 percent are for the email
specials and 78 percent are for delivery."
I assumed their online
ordering would come with a heavy set-up fee, but soon discovered there were no
set-up fees and only a $20 service charge per month. I spoke with Mani, and he
said that with just a $1 per-order fee, customers don't have a reason not to
order online. Not only does it produce higher ticket averages, but also fewer
mistakes are made.
Conclusion
In addition to creative
marketing, Big Guys Pizza & Pasta have learned that tracking what you do is
key to finding out what works. In addition to marketing in traditional ways,
they use high definition TVs as yet another way to draw customers in. It works
because there are several groups who come in on the weekends to watch the big
screens, eat and drink with friends. By getting out in the dining area and
talking with customers, they have earned catering business along with turning
the casual customer into a loyal fan.
-- PMQ
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