During my days in working in the Pizza Industry (I started my career at Pizza Hut and eventually was the VP of Marketing & Operations Services at Papa John’s), one thing always baffled me. Why did the pizza category have the highest deal rate among any restaurant category? (A deal rate simply means what percentage of customers felt that they buy the pizza at a price lower than the menu price.) In order to understand why the pizza category had become so deal/discount oriented, I developed the following hypothesis: 1.             For a customer, brand switching is very easy when ordering a pizza. To switch, a customer simply has to dial a different set of 10 numbers when ordering over the phone, or go to a different website for online ordering. That’s all it takes to switch brands! 2.             Consumers are always looking for who has the best deal or value offering, that day. As brand switching is so effortless, the brand offering the best value on a given day has the best chance of getting a customer to switch to the brand. Brands feed this "consumer addiction to value" by providing ongoing value offerings and discounts like this: 30% off Pizza Loyalty Card One specific practice caught my attention. It was a common practice to reward a frequent user with discounts. That simply means if you order 10 large pizzas on a calendar year, you get a special card that allows you to buy pizzas from the company for a 30% discount. When I performed some detailed focus groups with consumers, I learned the following: 1.       Consumers are okay with buying the pizza at its regular price. (Did the consumer not prove this by buying pizzas at regular price 10 times?) 2.       Getting the lower price made the customer realize that they were getting hosed by paying more than the fair price for the first 10 pizzas. (Whoa! What a way to start a relationship!) 3.       Giving the consumer a 30% discount for all future pizzas that year was deep discounting.   But did the consumer want the 30% off Pizza Loyalty Card? It is amazing how one gets the answer to every question when they talk to the customer. Of course asking the right question is very important. When I was moderating the focus groups I asked the customers if the 30% off pizza loyalty card would get them to come back to the pizza place over and over. The customers looked perplexed.  “Did we not prove to you that we have been to your restaurant to buy at the regular price more than ten times?” Good point, I thought. Then I asked, “So what do you want?”  It took the customers just a second to say, “Every time I order, put my pizza in the oven first, before everyone else’s.”  I asked myself, was the customer talking about a first class experience on a plane? “Remember my favorite order and deliver it without any mistakes.” “Give me something more that I did not order, e.g. breadsticks or cheesesticks. Or even some extra dipping sauce.” “Remember my name. When I call, your phone should ring with a different ring tone.” So what did the customer really want? As we cleaned the focus group room and sat down to de-brief, it dawned on me that the customer wanted to be treated special. Years later, I was revisiting the humbling learning experience from the focus groups. Then I got it. On a given day the customer buys just pizza one time, and we, in the store sell to hundreds of customers on any given day. The customer wants to feel that we are only making their pizza. Instead, they get an efficient, process-oriented response, in which everything is mechanical. There is no personal touch.  That is where things break down. This is what resulted in the birth of Marperations™.  Marperations™ is a place where we put the customer first.  There is no operations or marketing team in Marperations™. Instead everything is focused on guest experience and meeting the guest’s expectations. For a minute, forget the efficiency mantra of operations, forget the branding preaching from marketing; instead, be present with the customer and smile and ask… “What can I do for you?” Marperations™ is built on five universal truths:     1. Every customer interaction - which is usually in the exclusive domain of operations - is actually marketing to a significant extent.   2. Every advertising campaign - which is usually in the exclusive domain of marketing - sets the expectation that governs every sale and is therefore in the operations realm. 3. Linking marketing and operations is critical to presenting one unified message to the customer. This occurs from the start of the marketing communication to the actual sale of the product or service. 4. The better a company's operations run, the easier it is to market its product or service. 5. The better a company's marketing runs, the easier it is to perform the business of operations.    ...

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  Recently, I was visiting a Target. At check-out, I only had seven items so I went through the fast lane. It was quick and efficient. I was done in lightning speed. When I was ready to gather my bags and leave, I paused to look at the long line of regular customers who were buying more than 20 items. Their lines were long and the customers had tired looks on their faces. Poor guys. It is tough enough to go to the store with kids when you need to buy a lot of stuff, and then to wait in line forever seems like cruel and unusual punishment. That's when the light bulb went on for me. Whoa! Each of these customers is spending at least four to five times more than what I spent in the store. They are the higher volume customers. Aren't they more important for the store than me, and yet I got the fast checkout? Please do not get me wrong, I appreciate the fast line for the few-item-customers like me, but shouldn't the store treat the more valuable customers with more care? Visualize a Target trip where you go around the aisles and work hard to find all your daily and weekly needs. Finally when you come to check out, a staff in red uniform greets you. She gently takes over the cart from you and guides you to a desk. You sit down while she gets you a bottle of water. She then starts ringing each of your items and places them in bags and then runs your credit card. She asks you if you need a 24 pack bottled water or some other household items to take home. You gladly say yes, as this may be only time in the day you will be able to take a breather and sit down. You want it to last a little longer. Then the staff drives the cart to your car and loads everything in the trunk. As you get in the driver's seat and buckle up, the staff softly closes the door for you and smiles. You roll down the window and thank them. The staff member just smiles at you and says "Not a problem, Mrs. Jones. You are absolutely welcome. The next time you are in the store, look for me. Either I or any of my associates would love to assist you in any way we can. Drive safe." You roll the window up.  As you leave the parking lot, you realize that you are IN LOVE.  You are in love with the red Target sign. You love Target. And you are looking forward to the next meeting. Wow! Why can't this happen at Walmart, Costco, Sam's Club, BJ's, and even Home Depot? This is a customer centric Marperations model where there is no Operations or Marketing gap. Instead everything is focused on guest experience and surpassing the guest's expectations. For a minute, forget the efficiency mantra of Operations, forget the branding preaching of Marketing; instead, be present for the customer and let him feel the love your brand has for him. It is that simple.  ...

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(What happened after hours, just happened after hours.) Last week I attended the National Restaurant Association’s Marketing Executives Group (MEG) conference in Chicago. This is a list of the Top 10 Winners & 1 Hmmm at MEG this year. If you were absent, please contact your MEG friends to catch up on the scoop (as you really missed a big MEG). If you were there, here is a chance to remember the events again. Restaurant Marketing Group (a division of ZenMango) does not endorse any of the speakers (yet) and the Top 10 list is only based on active listening during the minutes I was not dozing. Here are my Top 10 Winners & 1 Hmmm. #10: HOW MANY DOES IT TAKE FOR A McTURN Neil Golden took us through the amazing journey of turning McDonald’s around. As I listened I was fascinated by the simplicity of his “going back to the basics” and “customer first” approach. At times, I felt that I could tune-out Neil since the McDonald’s story felt slightly irrelevant as most of us will never get to a budget that has that many ‘0s. What struck me, however, was that it is not easy to change the direction of a brand that big and that established. And he did. Huge accomplishment! Maybe it is the restaurant’s version of The Greatest Story Ever Told.  It also helped me realize why McDonald’s continues to have one of the lowest leaks in the business. (Source: Leaky Bucket® 2009 Study) #9: EXTENDING YOUR NAME (BUT NAMES CAN BE MISLEADING) I was really looking forward to Nancy Bailey’s presentation as I thought it would surely need volunteers to drink and sample. Maybe a few shots just before lunch, not a bad new MEG tradition. Instead the presentation turned out to be a learning on brand amplification: how to take a brand and make it crossover to the grocery aisle and beyond. Her presentation on brand extension was simply amazing, especially when I feel that one of the biggest weaknesses of restaurateurs is merchandising. Yes, I learned a lot, but I missed out on the free shots. #8: BLEND MARKETING AND OPERATIONS I guess it took an articulate Harvard Professor, with a tad bit of attitude (that is a compliment coming from the MEG group), to realize that it is all about the expectations Marketing sets and Operations fulfilling those expectations. But Professor Frei, two hours and thirty-six minutes before you wowed us, someone left the teaser cards on the tables about Marperations.  And Professor Frei, here is a suggestion for your next presentation. Get a big blender and then…  #7: POWER OF DELEGATION Mike of Darden may not be sitting on a hill as big as Neil Golden of McDonald’s, but he is still sitting on a hill with some decent resources. He showed us that once you become big (I mean really big), you must find brand ambassadors who can talk to the brand. His brand ambassadors are real customers who are passionate about the brand. Instead of Mike and team trying to fake-talk to the consumer, they have found the die-hard fans and trusted them to carry on the conversation. My interpretation of Mike’s message: if you cannot do it yourself, find a consultant and delegate.  #6: BE CREATIVE ABOUT CREATIVITY Before Joe the plumber, we at MEG have always have had our Randy the plumber.  Randy of G&M Plumbing, a restaurant industry veteran and now a break-thru media messenger, showed us that true creative writing (along with a diet of beer, wine and cocktails in all four meals) makes even blah news read worthy. He impressed me with his creatively focused story telling. Did you know Randy can get his phone calls through to any CEO, as every high functioning officer is still interested in insuring their plumbing still works? Based on Randy’s inspiration we are thinking of changing our company’s name ZenMango Preg Testing. Now I dare you to refuse that call. #5: RAKES DO SHAKE THINGS UP George from BlendTec should be called Houdini for his act of blending a rake. His “Will it Blend” campaign started with a $50 marketing budget, an amazing example of a creative way of communicating a benefit and letting the consumer figure out the rest. If you missed the videos, please go to www.willitblend.com. As I watched him rake in the applause, I realized that he was telling us that when the economy is down, you do not have to have a garage sale. Instead, blend in everything you have in the garage to feed the kids. Here is a hint for MEG teams who feel that their current marketing team is not being creative: simply give them a $50 budget and a sharp object. Magic is imminent. #4: OVERSHARING AND TATTOOS ON THE BUTT Stacey of California Tortilla was the perfect complement to Mike of Darden. Stacey has very limited resources and her world of “over-sharing” was an excellent example of being irreverent when that is what your brand is. She gave us a sneak peak of her upcoming “Get a tattoo on your butt and get a free burrito” campaign. It was amazing to see the line of potential volunteers who offered to assist her judge the contest. Pick me! Pick me! #3: MENU ENGINEERNG IS MORE THAN PROFITABILITY Greg Rapp’s inspired presentation on menu engineering was proven, yet kinda one-dimensional as it focused primarily on profitability. But it got us back bencher’s to think, and we came up with a model we feel menu engineering should also look at: (actual sketch is attached.) Lane Cardwell and I realized that designing for profitability is great when you have to score a touchdown to get ahead in a game. But in a world where you are playing for a two point conversion followed by an on-side conversion to survive, “what will drive repeat” is also a timely and relevant measure for menu engineering. #2: BE THE CONTENT George from BlendTec showed us that in traditional medium, content is provided by the content-provider (TV show, news, or radio program). We advertisers are the content interrupter. In the world of social media, the onus is on us to be the content provider and not be an interrupter.  Now that is big. Late night, MEG attendees were trickling back into the hotel singing the song “I want to be the content”.  Thanks George! #1: IT IS ALL ABOUT THE SIZE OF YOUR HEART We all know that the only thing marketing budgets and dinosaurs have in common is extinction.  Saturday morning Clint and I walked through the National Restaurant Show after MEG, and trinkets were simply absent. (I am not counting leftovers from 2008, where 8 were scratched off and 9 were written next to it, nor the sole yo-yo we found after an hour of searching). In that world of nothings, the MEG team pulled off an amazing show.  To me it was a clear example that it is not the food or the free booze, it is not just the networking, but it is the heart of MEG that makes us comes back. THE ONLY HMMM National Restaurant Association revealed its upcoming promotion to drive more restaurant visits.  As it is a secret (for now), I cannot talk about what it is, but here is what it made me feel as a customer: I realized (based on the ad) that I am still a good person as a lot of people are not eating out. I am not alone. I do not feel guilty anymore, and I don’t have to take my family out to eat. The ad to me simply reconfirmed that it is okay to be at home and not eat out. With all the amazing talent at MEG and other restaurant companies, I cannot help but ask… Why did the National Restaurant Association not reach out to the restaurant marketers? I am sure a panel of MEG-ees, over a few bottles of wine, would have certainly made a traffic driving ad....

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RMG believes in identifying information that makes action inevitable. Identifying the value of a customer and how to move them up the frequency ladder is a guaranteed way to increase a brand’s sales. RMG strongly recommends quarterly measurements of a brand’s customer base and identifying the volume of each usage group and how much each group is worth. That information, along with the tools of Guest Experience Enhancement, enables a brand to embark on a journey to Wow 1 More™ customer, one at a time. The ROI of this initiative is huge as a brand is using its current store labor to wow its customers. Team members get motivated with a clear goal and customers find more compelling reasons to come back and increase your sales. ...

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ZenMango uses the following three rules develop a unified measure of Marperations™: The measure must be a leading indicator and not a trailing indicator. A leading indicator allows a brand to tweak its marketing and operations strategies to influence that same leading indicator. The measure should be simple and communicated all through the organization. It needs a life outside the company’s boardroom. Both Marketing and Operations departments should be encouraged to have their own functional report cards. However, they must clearly understand how their report cards connect to a brand’s overall success. The three Marperations™ measures for a pizza brand could be: number of customers number of dough balls revenue per dough ball The pizza brand orders dough balls a week in advance. Marketing can make efforts increase demand for the coming week. This will necessitate sending more dough balls to a store, and also necessitate Operations to adjust its service standards in order to better serve the increased number of guests in the coming week. Marketing and Operations evaluating the performance of a pizza delivery driver: How Marketing evaluates the pizza driver Marketing is measured on effectiveness. Marketing wants to measure every experience, one at a time, to make sure that customer’s expectations were made every time. Effectiveness in pizza delivery is measured by the driver delivering only the pizza ordered by the customer, and then the driver pausing to make sure that all of customer’s needs are met. The driver is a messenger for the brand. In this case, the driver will be reprimanded for trying to complete seven orders at a time, instead of just focusing on the one order in front of him. How Operations evaluates the pizza driver Operations is measured on efficiency. Operations also measures success by rewarding consistency and how well they can conform. Operations is a production mind-set where every occasion has to be the same, every time. Efficiency in pizza delivery is measured by number of pizzas delivered per trip and number of deliveries per shift. Consistency in pizza delivery is measured by ensuring the driver’s uniform, greeting, and smile are exactly the same as the training manual. In this case, driver is considered as efficient since he is delivering seven pizzas at a time, but he will be reprimanded for wearing his cap backwards....

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