A piece of Parnelli's

A former-seafood-restaurant-now-pizzeria in Springfield, Kentucky is quickly marketing its way to success. Using traditional methods such as box toppers and coupons, Parnelli’s managed to increase their customer base by 400 people during the month of March in 2004 through a pizza give-away.

Parnelli’s came into being in November of 2003 after a name change from a seafood store called Linc’s. Parnelli’s owner Doug Elliott told me that he got out of the seafood business because of the expense. “Seafood got so expensive that I wasn’t really making any money,” Doug said. “So we had a name change to Parnelli’s Italian and American Eatery. My price point on pizza isn’t as high as the seafood, but I make more per pizza than I did with the seafood.”

Free Pizza Give-away!

Attempting to get more people to try his pizza, Doug decided to host a pizza give-away. He didn’t give a pizza or two to just one lucky person. No—he decided to give a pizza to anyone that called in and left his or her information. “People were required to call our ‘Pizza Hotline,’ which was pretty much an answering machine, and leave their name, number and address. We then sent them a postcard coupon good for one medium sausage, pepperoni or cheese pizza.”

To get the word out, Doug ran an ad in the paper. “Really, the only help we had with this promotion came from the paper,” Doug told me. “When the paper’s staff realized that we really were giving away pizza, they gave us free color. Of course, we still had to pay for the ad itself.” They only ran the advertisement once in the paper. Doug speculates that for the most part, people heard about the promotion completely by word of mouth. “What probably happened is that someone saw the ad, and then called all of their friends to tell them about the free pizza and ended up giving them the number.”

Giving away the store

Doug received 354 calls requesting the free pizza coupon. Of those 354 responders, 244 actually used the coupon, which comes out to a 69 percent redemption rate. All in all, Doug estimates that he spent between $400 and $500 giving away the pizzas. “Most of the people that ordered the free pizza were new customers,” Doug told me. “I sent out box toppers with the free pizzas that offered a free two-liter drink with the purchase of another pizza.” About a month after the free pizza deal, Doug sent out a mailer with a buy-one, get-one-free deal to all of the 244 people who used the coupon. With this deal, 46 were redeemed and boosted his sales by $497.

The offer was good for dine-in or carryout. At that time, Parnelli’s didn’t offer delivery. Doug said that he is thinking about possibly repeating this promotion during the slower summer months and in nearby towns. “If I ever do it again, I would limit it to just dine-in customers,” Doug said. “At least that way, you can get some of your costs back by selling drinks and sides. If someone came and picked it up, they often didn’t order anything else and just left.”

How did he keep people from forging the coupon? Doug told me that they only sent out one coupon per address. “Every once in a while we’d get a mother that would call in twice and put the coupon request in a couple of her kid’s names,” Doug told me. “We’d catch it because it would be going to the same address. We’d send one to the address but ignore the other names.”

POSte. All in all, Doug estimates that he spent between $400 and $500 giving away the pizzas. “Most of the people that ordered the free pizza were new customers,” Doug told me. “I sent out box toppers with the free pizzas that offered a free two-liter drink with the purchase of another pizza.” About a month after the free pizza deal, Doug sent out a mailer with a buy-one, get-one-free deal to all of the 244 people who used the coupon. With this deal, 46 were redeemed and boosted his sales by $497.

The offer was good for dine-in or carryout. At that time, Parnelli’s didn’t offer delivery. Doug said that he is thinking about possibly repeating this promotion during the slower summer months and in nearby towns. “If I ever do it again, I would limit it to just dine-in customers,” Doug said. “At least that way, you can get some of your costs back by selling drinks and sides. If someone came and picked it up, they often didn’t order anything else and just left.”

How did he keep people from forging the coupon? Doug told me that they only sent out one coupon per address. “Every once in a while we’d get a mother that would call in twice and put the coupon request in a couple of her kid’s names,” Doug told me. “We’d catch it because it would be going to the same address. We’d send one to the address but ignore the other names.”

POS Power?

Doug does not yet have a POS system at Parnelli’s and freely admits that he couldn’t have done the promotion without the help of his wife Kathy. “We keep up with everything on our computer at home,” Doug told me. “So far, it’s worked but our size is still fairly small.” With the info they collected, they plan to send out birthday cards and specials to everyone in their database (between 3,000 and 4,000 people now). They currently send out about 300 birthday cards a month. On the birthday cards for children, he offers a free small pizza with a beverage and chocolate sundae. As part of that, he invites the kids back to the kitchen to build their own pies and takes their pictures for his “Birthday Wall of Fame.”

Outside of this promotion, he markets to school kids and at blood drives. For the blood drives, he hands out certificates to people for donating blood. “When the local schools’ honor rolls come out, we send out a coupon for free personal pan pizza or a free pizza/pasta buffet,” Doug said. “We like to focus on marketing to the younger kids because they bring family with them—parents, siblings, grandparents—so we get some of our money back; however, we do send out coupons to graduating seniors for a free Sunday Brunch.” He added that the coupons always have expiration dates.

“I got a lot of good will from the community,” Doug said about the promotion. “Most of my loyal customers told me that since they’d buy from me anyway, they wouldn’t take advantage of the offer. We offer other foods like steak, sandwiches and buffets with a variety of food. This offer was just to push the pizza and get people to try it. It’s nice to have the best pizza in town, but you have to market it. You can advertise all you want about your pizza, but until people actually taste it and see for themselves how good your pizza is, you’re just tooting your own horn. Giving away free pizza to potential customers is a foolproof plan if your pizza really is the best in town. Our pizza is the best because we use fresh produce for toppings—tomatoes, mushrooms, onions and spinach—and cut them fresh every day. We make our own dough from scratch every morning and blend our own pizza sauce.”

Since the promotion came right on the heels of the name change, Doug isn’t sure what his sales were before the promotion, but says that he makes about $10,000 gross sales in a good week now. “Before the promotion, we had so many people coming in, still thinking we were the seafood restaurant and then staying to eat that we don’t really have accurate numbers for people that came for our pizza,” Doug said.

In the words of the old cliché, you have to spend money to make money. For the $400 Doug spent on his pizza give-away, he added new names to his mailer list numbering into the hundreds, boosted the recognition-factor of his pizza and increased sales on side items. Sometimes, it really does pay to spend.