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Shakey’s Pizza was founded by Sherwood “Shakey” Johnson and Ed Plummer in April of 1954. Shakey’s originally opened in Sacramento, California, and became known not for its pizza, but for its jazz program. Johnson loved jazz, and being a Dixieland pianist, he personally played the piano and banjo for patrons as they came through. By 1967 Shakey’s had more than 250 locations throughout the United States and the world, including the Philippines and Japan. By 1974, there were more than 500 units to the Shakey’s name, which, through time and many different acquisitions and buyouts, led to Shakeys’ downfall. Present day Shakey’s is a brand that’s in a revitalization and rejuvenation period, according to President/CEO Tim Pulido. With 62 stores mostly in the Southern California area, the direction for the franchise is to pay homage to the past while moving Shakey’s into the 21st Century.
Paying Attention to Customers
Tim said first and foremost, “We started with the customer first so we needed to very clearly define our brand positioning. We wanted to have something that would evolve from our heritage, but also something that would be very relevant to our customers today.”
Shakeys’ target consumers are particularly families with kids aged five to 11, a.k.a. “tweeners.” Tim said their new prototypes reflect what they want the brand to be. “We’ve taken everything from the logo to the uniforms, the color palette in the restaurants, the décor, and all has been updated and changed. You’ll see our core heritage logo is still there, but we’ve designed changes to modernize it.” There are two new prototypes, one located in Covina, Calif., and one in Burbank. In Covina, they are testing the elimination of their daily buffet, and now don the restaurant Shakey’s Pizza and Grill. “We’ve added on new categories: fresh salads, new sandwiches, hamburgers, and of course, we’ve still got the chicken and Mojos,” a proprietary fried potato recipe found only at Shakey’s. In planning for their new prototypes, Tim said one goal was to make the restaurants more adult-friendly while still focusing on kids and entertainment. “We wanted to make sure adults would come in and think, ‘wow, this is a nice restaurant. I could eat with my wife and we’ll have a great time here, as well as the kids’,” he said. The way to achieve this, Tim said, was to divide the game room from the main dining room. “In the new prototype, there is a glass partition that separates those two areas.”
With a franchise system that was once 500 units strong, what could make Shakey’s shrink to 62 units? “They often milked the business instead of helping it grow,” he said. Tim is the former Chief Marketing Officer for Pizza Hut, and was very instrumental in the launch of their Stuffed Crust Pizza. “My time with Pizza Hut, McDonald’s and most recently with Pick up Stix, has been focused on getting the brand right and making sure the concept in the marketplace reflects that brand position and then adding more sales momentum with relevant new product news,” Tim said. His time spent in operations and brand positioning has led him to believe that success is based on customer service, food quality, and cleanliness. “Sometimes in brand positioning, the most important decisions are not just what you are going to be, but what you are not going to be.”
Marketing in a Media-Expensive Area
Tim and Cindy Staats, Director of Marketing for Shakey’s, both admitted that the Southern California area, specifically Los Angeles, is a media-expensive market. “As the brand gets more established, we could then move to more general market media, but our initial focus has to be on our trade areas and neighborhoods,” Tim attested. In an effort to reconnect to the communities, Shakey’s has taken several different approaches in marketing on a localized level.
Cindy noted that the more expensive forms of advertising aren’t always the best. “Because we really strive to be community-oriented, some of the lower cost programs we do are very effective.” One such example is their in-house fundraising promotions. “We’re very busy on the weekends, but our Monday through Thursday timeframe is an area we try to work on to drive traffic. We utilize that by promoting fundraisers in our restaurant, offering community groups parties where we donate back money to their group,” Cindy said. “For example, this past January, we had a group come in on their designated night. They came to the restaurant and as they arrive they tell the cashier which group they are with. We keep track of how many people are from the group. Then, when the evening is over, we mail them a check for 25 percent of the total net food sales.” The group in question for that evening was St. Hillary’s Catholic School. “We sent them a check for $900,” she said. Although she admitted that number was atypical, she said for them it creates repeat business, trial of food, and also, the revenue generated on the gaming isn’t included in the amount.
So how do you promote something like this? “We contact schools and non-profit organizations by sending postcards or simply picking up the phone and making calls. In some communities, the managers will visit the schools. It’s an ongoing process to look for groups to bring into our restaurant.” Shakey’s also has programs with the elementary schools offering certificates for student of the month, reading certificates, and grade completion certificates. “We focus our efforts on the elementary schools,” she said. “It’s providing the community something, and we win as well because we’re getting trial of our product.”
With the grade completion certificates, Shakey’s has been able to get a certificate in the hands of almost every child in the Southern California area. “At the end of the year, when elementary students are graduating from a grade, we give them a little diploma that’s good for a free individual pizza. If the school has 600 kids, everyone of them will get a certificate,” she continues, “and where are they going to go celebrate? At Shakey’s.” Shakey’s did that for each restaurant in 2006, giving away nearly 750,000 certificates. “Each restaurant that participates pitches in a set amount of money to participate. It costs about $400 per store to execute,” she informed.
Shakey’s Signature Service
“Much of our focus in the next few years is in our training. We want to provide what we call signature service—really providing an excellent experience that creates positive word of mouth,” Cindy apprised. “We’re implementing training for our cashiers and converting them to what we call ‘guest service leaders.’” The training program will be a continuous learning experience where they can work on suggestive selling and providing great service. In a rushed environment, and one with customers that sometimes are dissatisfied, Cindy said it’s imperative to be sure the team members are fully prepared for those inevitable moments. “The first thing we’ll do is role play those types of situations, and practice giving the best service and how to deal with those customers that may not be happy.” Cindy said having employees that will cooperate under those circumstances means treating them well. “We have incentive awards programs so if they’re promoting the item of the week, or have done a great job dealing with customers, we’ll motivate them with gift cards or whatever the incentive program is at the time,” she said.
Marketing with Technology
Shakey’s doesn’t currently offer online ordering through their website, but they have recently invested in an email marketing campaign. “In our new Covina Pizza and Grill, we are in the middle of a brand new email campaign that was launched in late December of last year (2006),” Cindy said. Although she didn’t have the complete results at the time of the interview, she said the very first day the email went out they received more than 70 coupons in the store from customers who had received the offer. “The email addresses weren’t from a database of our patrons, but instead from a list we purchased. We provide them with the artwork for the emails, and they send it out.” The email blast was sent to about 10,000 email addresses, both businesses and homes.
The Future of Shakey’s
Tim said in time, he feels Shakey’s has the potential to return itself to a 500-unit chain again. “It may not be spread across all 50 states, but we do feel there is a lot of penetration for this concept in the markets where the brand once was. In five years, we see ourselves doubling or tripling in size,” he said. With remodels and more prototypes on the way, Tim said the customer ratings have been excellent. “We’ve seen exceptional sales growth for 2006, in excess of seven percent. Compared to past five years, that’s a huge improvement.” He said sales over the past years were positive, but only in the one to two percent range. “After we get more prototypes built in 2007, we will then reinitiate franchising in a big way.” Once again shaking the world with the might of a brand.