From the horse's mouth

How have cheese prices affected your operations and what have you done to compensate for the high prices?

Scott Hack – We surgically raised prices on a few menu items. The items we raised prices on though, really had very little to do with rising cheese prices. It was just a helpful reminder that we needed to bring a few of our items up to market price. We changed the price of our bread sticks and cheese sticks and made available larger sized orders of our cheese sticks so we now have a small, medium and large order of cheese sticks. It has created another up-sell opportunity on the phone. We also officially stopped taking all of our old coupons that have expired. The food cost on most of those old coupons was too high.

Denise Rintz – We have cut back on some of the pizza specials that we were running. We have raised some of our menu prices and are adding more pasta dishes.

Jeff Aufdencamp – We have watched cheese prices rise and the gloomy forecast for the summer. Jodi and I decided after many long, sometimes heated discussions to raise our prices by 50 cents for a 12-inch, 75 cents for our 14-inch, and $1 for the 16-inch. Raising prices is a tough decision to make, but we have been in business for four years and this is our first price increase. We felt that our customers buy our product for the quality, not the price. I have personally explained to a lot of folks that if we don't raise our prices, we will not be here next year. Everyone I spoke with supported the price increase after explaining the rising cost of goods. The upside to all of this is that we will have higher profit margins after the market correction.

Jim Dickey – Cheese prices have taken a large percentage of profits. We buy our menus in large quantities, so we can't really change menu prices on the fly. Our next menu will have an increase in our pizza section. Until then, we have to ride it out. We will make up lost profits on the back end as the cheese prices go lower and our new increases on pizzas kick in. The one thing we tried to do to combat the price increases was to buy our cheese in quantities that would last us a month or so. We would buy our cheese the week before we knew large increases were coming. Also, with our larger purchases, we were able to negotiate a little bit better price between our vendors because they wanted the volume business. The one thing I heard many people doing that we did not want to do was to use less cheese on our pizzas. We did not want to put out a lesser product just to save money. The risk of losing a customer is not worth it.

How do you go about adding new menu items?

Scott Hack – We bundle it with our pizza as an in-house special.

Denise Rintz – We offer new items as a special to see what kind of feedback we receive before adding them to the menu.

Jeff Aufdencamp – We add new menu items after we run them as a daily special. The most popular specials are then added to new menus after we receive a positive response from our customers.

Jim Dickey – We decide if it fits our menu. We want to add items that will be add-ons or possibly bring us in a new type of customer. We decide on a price and if it’s profitable. We get employees to try it. We give it away to our better customers to try. With their input, we either 86 it, try it out on our next menu or tweak the item a little bit.

What is your best form of advertising? Boxtoppers? Direct Mail? Flyers, Radio, TV, other?

Scott Hack – Direct mail seems to work best for us. We do box top as well, but redemption is never very high.

Denise Rintz – Our best response rate has been direct mail.

Jeff Aufdencamp – I wish there was an easy answer to this question. The best form of marketing for us so far has been excellent customer service and a superior product. We are a small start-up company. The money we have made thus far has gone to open new stores and create a strong presence as the first Take-N-Bake operator in our market. We feel that by being friendly and honoring special requests without attitude creates a buzz money can't buy! We self-coupon all of our pizzas and get three times as many of our own coupons as any we ever pay for. We have also started an e-mail marketing program with E-Intouch Dining based in Indianapolis. The results have been very positive and cost-effective. The best thing to ever happen to us, marketing wise, was winning a place on the U.S. Pizza Team. The free publicity from winning tripled our sales overnight. The contest win has seen us grow from one to four stores in only four years. I think that speaks for itself in this business, especially since the concept of Take-N-Bake was completely new when we opened.

Jim Dickey – I believe the best form and sometimes the cheapest form of advertising is free food. A large part of our business is car dealers, doctors, retail shopping places and business parks. They all order out. If someone is not a customer of yours, go to them with a couple pizzas, introduce yourself, smile, make a little small talk, let them know how much you would like their business and leave plenty of menus. You will hear from them…trust me.