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Marketing Marvels - Fired-Up Marketing
By Liz Barrett
Serving up wood-fi red pizzas to Washington’s Puget Sound region for more than 10 years, Farrelli’s Pizza (www.farrellispizza.com) boasts fi ve locations and a growing “family” of employees. Clayton Krueger, Farrelli’s director of marketing and communications, tells PMQ about the company that hired him as a dishwasher at age 16, moved him up through every chef position in the kitchen until he left to pursue his college education, and then welcomed him back in 2007. “I’ve never worked for another company that operates with the mind-set that the employees come first; Farrelli’s success is the result of that mentality,” says Krueger.
What have been some of your best marketing
promotions, and why?
The best results we’ve seen have stemmed from customer
loyalty marketing via direct mail and email, as well as the four
walls that market inside our stores; both encourage customers
to increase the frequency of their visits. While we don’t
neglect trying to bring in new customers, we’ve found over the
years that it’s easier and more effective to encourage our current
customers to come back more often than it is to attract a
new customer.
How much of your monthly budget is relegated to your
marketing efforts?
Our marketing budget is based on a percentage of sales; we
allocate roughly 2.5% of sales toward our marketing efforts.
How do you collect information from your customers
for marketing?
As you know, knowledge is power, especially in the world
of marketing. We attain our market-specifi c knowledge about
our customers in a number of ways: 1) We have a customer
loyalty program, which we have branded as our Fire Club—
people sign up by submitting their information to us (they save
10% on their bill if they sign up during their visit), and in turn
they receive various offers and incentives to visit our stores; 2)
we’ve recently committed to an E-Frequency program through
our POS system, which collects and maintains the data of our
card-carrying loyal customers and stores it in a database for
us to mine at our discretion; and 3) we have recently decided
to undergo some market research in the form of focus group
testing, as well as survey analysis, which will help us determine
a lot of information
about our clientele. Equally important as how you collect
your customer’s data is how you use that data.
How often do you contact customers?
We reach our patrons in two ways: via email and via snail
mail. We send out emails to our Fire Club members once to
twice monthly with a special offer that only they receive. They
also receive an email with a gift certifi cate on their birthday
month, and in the anniversary month (when they signed up for
our Fire Club). They also receive a gift certifi cate email when
they sign up. As for the snail mail version, this is an extension
of our direct mail effort; these folks receive a mail piece quarterly
with a special offer that only they receive.
How does your direct mail campaign work?
This campaign is really a tier program. First, we are test
marketing a new movers program, as well as a birthday mailer
program. These pieces will directly target those individuals
who meet the demographic criteria around our stores that have
either just recently moved into our neighborhoods, or will be
celebrating a birthday within the month. We are then signing up
with a menu mailer company to produce and mail out a really
professional menu that is well-branded with our company’s
logo, values, products and staff. Finally, we are working on a letter
that will introduce our business to the direct mail recipient
in a way that explains to them why it is that our “Great People
Make Great Pizza,” and will be a follow-up piece to the others.
This last piece will have different incentives to get people to visit
the store, in the form of coupons that we can track.
Do you advertise in any traditional media?
We recently found out that many of the major
radio stations in the greater Seattle market have
programs in which you trade gift certifi cates for
airtime. They sell your gift certifi cates on their
website for a reduced rate and in return promote
your business on the air and through their website.
This is an inexpensive way for us to test the radio
waters and has been fairly successful at generating
brand awareness. We’re continuing to pursue
various programs on different radio stations and
are tracking the results from each station; that
way, we’ll know who to utilize for this purpose in
the future. Perhaps, in the future, we will move
toward television advertising, but we want to have
a few more stores in a different geographical region
before we do so. We have advertised in newspapers
in the past and will continue to do so when we
have something to share with the community but,
for the most part, we have stopped our newspaper
advertising efforts to focus on developing our
people. We are also looking into Web advertising
but haven’t committed to anything yet.
How do you market to kids?
We start by offering family meal deals and other
promotions where kids can eat free with paying
adults. We have a special kids menu, with kid
pricing and items that you won’t find on our other
menus. These menus also have fun drawings and
puzzles that the kids can work on while they wait
for their food, and we change the menus monthly
to keep them fresh. We also have performers
come in and entertain the kids on designated
nights at our various stores. Currently, the entertainment
we have for the kids is a pair of very
talented magicians—so talented, in fact, that once
they’re done entertaining the children, they move
to the bar and entertain the adults.
How has having a full bar helped your
bottom line?
The full bar has always been a part of the Farrelli’s
business model and has doubled our bottom line because we're essentially operating two separate businesses under one roof
with seamless integration and interaction between staff and
customers. We’ve made changes to our bars over the years to
increase their effectiveness, and we believe we’ve found the
winning formula. First and foremost, we
think of them as the adult only side of
our restaurant—a place where adults can
retreat from the excitement and noise
of the children and families over on the
restaurant side. Likewise, we think of our
restaurant side as the family side of our
establishment. The difference between
viewing the different sides of our business
as being adults and family vs. bar and
restaurant has really helped to seamlessly integrate the two under one roof. Second, to support the
strategy described above, we’ve added booth and table seating
to our bars to make it a comfortable environment to eat a
meal in, as well as socialize in—the result being higher ticket
averages. The bars also feature pool tables and pull-tab games,
and every seat faces at least one large flat panel television to
view various sporting events.
How do you promote your happy hour menu to bring in
more customers?
Our happy hour is offered seven days a week, from 2 to 6
p.m. and 9 p.m. to close, as well as all day on Sundays. Aside
from that, it’s prominently displayed on the front cover of our
bar menus and is also posted on our branded drink coasters.
We list it on our regular menus, on our website, and on our
MySpace page (www.myspace.com/farrellis), as well.
How do your pull-tab games work?
Where did the
idea come from?
Our current business model is the culmination of many past
business models operated by the founder of Farrelli’s, John
Farrell. He had experienced success at increasing the bottom
line with pull tabs in his previous restaurant concepts, and we
didn’t see any reason to omit them from the Farrelli’s concept,
although it isn’t a primary focus. There’s a segment of the
market that likes to gamble in the environment that we create
inside of our bars, so we offer those individuals the opportunity
to do so. Pull tabs are a numbers game, and we have to train
our dealers well to keep those numbers in our favor. Sometimes
they win and sometimes we win, but that’s the nature of
gambling. If executed properly, pull tabs can be an easy way to
generate real bottom-line results with low overhead.
How do you keep a low employee turnover?
We show our employees (we refer to them as Farrelli’s Family
Members) that we value them in a number of ways, including,
but not limited to, the following: 1) we pay more than the
industry average; 2) we celebrate our success as a team; 3) we
have many incentive programs; 4) we send our staff to different
seminars and classes to increase their level of education and
develop them as people; and 5) we take them on trips to
industry-related trade shows. That’s the basic formula for our
success; the result is a low turnover rate and a satisfi ed staff.
Has your MySpace page helped garner more attention
for the restaurant? In what ways?
I don’t think that MySpace has helped to attract new
customers so much as it’s helped us stay in communication
with our current customers. As you know, MySpace is a social
networking site, and we try hard to use it as such. When people,
including our employees, are in our establishments, we work
really hard to make them feel like they’re a part of our family.
The idea behind MySpace is to allow them to experience that
same feeling when they’re not here by giving them a forum
to interact with staff as well as other customers, all while
being exposed to our brand, our ongoing promotions, our
entertainment schedule, and various other company-specifi c
information. If for no other reason at all, we like MySpace for
allowing us to promote our business and, more specifi cally, our
upcoming events and promotions, to whoever wishes to listen.
When did you start offering whole-wheat dough? How are
you marketing it to your customers?
We launched our 100% whole-wheat honey dough in
September 2007, just prior to American Diabetes Month in
November. We introduced the product to our customers with
a new menu page, special recipes and special prices. We also
attended several community diabetes events during the month
of November to show the surrounding medical and diabetic
communities that we are pioneering a new frontier of healthy/
diabetic-friendly pizza. We were received very positively
at these events, and the result was increased traffi c to our
stores. We’ve since shifted our focus from the product being
a diabetic-friendly product to being a healthy alternative for
anyone looking to enjoy a tasty slice of pizza while at the same
time getting their daily intake of whole grains. The reaction
has been positive, and we’re still working to spread the word
about the product as a dietary option.
How do you interact with your community?
Part of our company’s mission is to nourish the communities
in which we operate. We go about doing so by donating our
time, products and efforts to multiple local charities, foundations
and organizations in our communities. We participate in
community groups, street fairs, parades and other events that
bring our communities together. We do this because we live in
these communities, too, so it really benefi ts all of us.
What is the best business advice you can pass on
to other pizzeria owners?
As John would say, you need to “keep score,” meaning
you must know your numbers as well as you know your
people. Going one step further, your people should know
your numbers, too. They must have set, attainable goals
that they are striving to hit. This gives your employees
buy-in and commitment. We give our employees incentives
if they make their numbers, which encourages them all to
take ownership and to be very conscious of the decisions
that they make. The result is a committed staff and a very
effi cient operation. Keeping score is an essential part of our
business model and should be an essential part of every
restaurant owner’s operation.