Net Gains from Online Marketing

Web ordering allows Pizza My Heart to create more personalized marketing promotions at a fraction of the traditional cost.

By Margaret Littman, Contributing Editor -- Chain Leader, 1/1/2009

Pizza My Heart teamed up with a third-party online-ordering provider to streamline delivery orders and find new, cost-effective ways to delivery targeted marketing messages.

Chuck Hammers admits he wasn't enthusiastic about the idea of customers placing their pizza orders on the Web. The founder of Pizza My Heart, a 16-unit, Capitola Beach, Calif.-based restaurant chain with an obsessive local following, prided himself on the extensive customer-service training his staff completed, and he wanted customers to benefit from it. But the opportunity to tailor the marketing message while lowering labor costs made him think again.

“I didn't realize that people don't always want that contact. They want the Web,” Hammers explains. Corporate customers wanted to order pizza for meetings from the office. The Web sped the process along.

Hammers saw the Web light when Pizza My Heart started working with GetQuik more than a year ago. The Santa Clara, Calif.-based company is a destination Web site, like eBay, where hungry diners go to find and order from participating restaurants (currently more than 100). GetQuik Founder and CEO Ken Ryu estimates that per unit, the average annual GetQuik transaction volume is $9,000.

Caught in the Web

In the last six months, Pizza My Heart's delivery orders on the Web rose to 6 percent from 2 percent. In some busy locales, such as a beachfront store, Hammers says he saw customers get in the back of the line, use the Web application on their iPhone to place an order and pick it up by the time they got to the front of the line.

Average check from online orders are five times higher than in-store orders at Pizza My Heart.

Web ordering also allows customers to see their previous order history, so corporate clients who want the same thing for lunch every month do not need to re-enter orders and do not have to worry about order accuracy. As a result, Hammers thinks 20 percent to 30 percent of orders will be online in the next few years. In a pizza restaurant, 80 percent to 90 percent of all orders come in at 20 percent of the time the restaurant is open (lunch and dinner peaks), so having the Web to take some call volume off during prime time has already increased efficiency and reduced labor costs, Hammers says.

Deals Made to Order

More than just the labor savings, Pizza My Heart sees Web ordering as a way to target marketing efforts to specific customers for far less than traditional marketing or even e-newsletters.

“Instead of throwing four or five offers at them, we just send one,” Hammers says. Recent offers included two-for-one slices on Friday afternoons and Monday night football specials only ordered through the Web. “They have brought in new customers,” he says.

Restaurants pay GetQuik 10 percent per order received through the site, but GetQuik covers the credit card fees, so Hammers says it is closer to 7 percent. He gets detailed data about who ordered when and from where, and there are no monthly fees.

Finally, Pizza My Heart doesn't pay if there is not an order placed. You can't say that for direct mail.

MORE: Cuba Libre posts cooking demonstrations on YouTube to get exposure in new markets.

Snapshot

Concept Pizza My Heart

Headquarters Capitola Beach, Calif.

Units 16

2008 Systemwide Sales $18 million

Average Check $8 inside, $25 delivery, $40 on Web with GetQuik

Expansion Plans 1 or 2 units annually

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