Punxsutawney, PA

Tuesday, April 08, 2008

Watching the News? The current economic condition is given the burden of the R word – recession. Consumers worry about keeping a roof over their heads and about rising costs for fuel and food, so there's little thought of taking a vacation, splurging at the store or even going out to eat. Retailers reported January sales figures below already-low estimates, further fanning the notion that the U.S. economy is about to, or already has entered, a recession.

The National Restaurant Association's Restaurant Performance Index (RPI) - a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry - stood at its lowest level since February 2003. "In addition to reporting declines in both same-store sales and customer traffic, restaurant operators continued to pull back on capital spending" said Hudson Riehle, senior vice president of Research and Information Services for the Association. Operators are concerned about the economy, especially with last year's record 7.2% increase in food costs, reported to be the biggest jump in 27years.

They are not alone; when economic times get tough the nation's charitable giving historically declines. Charitable organizations are already beefing up efforts to deepen their connections with those who already give and establish mutually beneficial relationships. Over the decades, U.S. giving has risen except when the economy takes a nose dive. Contributions typically fall by 2% - 5% during a recession", said Patrick Rooney, research director for the Center on Philanthropy at Indiana University.

Fact is times are tough and forecasted to get tougher before things turn around. We need to 'do the math'. The law of signs when multiplying; When both factors are negative the product is positive. How can your business can change the world and make a profit? Partner up, fight to the finish and the results will be multifold.

Since launching Salesforce.com in the late 1990s, Marc Benioff has built a multi-billion dollar operation. Interestingly enough, Benioff thinks that a big key to success has been his company's philanthropic efforts – that has helped with employee morale, community involvement and even customer loyalty. These principles are particularly transferable to the pizza industry. Operators responding at the national and/or local level will keep and continue brand awareness. As a Fox's Pizza Den Franchisee, I have seen this scenario play out with our annual Pizza & Prevention event in which 100% of sales are donated to the local fire companies. (October 9, 2007 HOT SLICE) Note the response:

"I think everything done for the community has really boosted the opinion of people who maybe didn't know much about Fox's before. They know you donate a lot of your time and money to help others other than yourself, so maybe they wouldn't normally donate to a charity or group but they buy their food from you knowing that indirectly it will help you and some other needy organization, People routinely make comments about Fox's just because they hear your business name all the time" - Matthew Powell – President Punxsutawney Fire Department

"In softer economic times, a natural inclination is to basically manage costs much more effectively, and that makes sense," Riehle said. "But, in softer economic times, it's important to highlight the proportion of resources that need to be allocated toward marketing, advertising and local messaging that need to be stepped up because the need is there to really act as a catalyst to spur that indecisive consumer toward turning to your brand"

Such efforts take time and energy. You need to find a cause where your product, audience and charity are aligned. "People sense sincerity, and people deserve to know why giving to a certain non-profit or cause is meaningful to the company no matter how big or small" Toronto-based Pizza Nova reinforces who they are by their involvement with Variety – The Children's Charity. Marketing Director, Stephanie Angelone adds "we admire them for the work they do and we can witness the children's development when we visit the Variety Village facility.

Addam Oliver, owner of Bernie O's Pizza in North Muskegon, MI, participated in The Taste of Muskegon, an event where half of the profits went to the Make-A-Wish Foundation. We sold 1700 slices, made twice what we would normally make on each pizza, gained priceless exposure and most importantly, our sales went up 30% and never dropped back down!" Network morning show Breakfast TV now joins with Pizza Nova to promote their cause, giving them priceless community exposure.

Make sure there's a pay-off in it for everyone. Those who donate get significant publicity value for participating, which helps them build their business. Those who shop get unique, one-of-a-kind items and opportunities. The non-profit group gets the dollars. Even in philanthropy, people act according to self-interest much more often than public virtue, so don't fight that, use it to your advantage. An irresistible price pint will help your cause. Pizza Nova sells a medium pepperoni pizza for 3.99 during their That's Amore Pizza for Kids event; the 2007 event had all 120 locations making a pizza per minute and raised over $85,000 in a single day for Variety. Give everyone a reason to support your efforts and they will.

Our Fox's Pizza Den location also participates in a tuition rebate program where gift certificates are purchased at their face value with a portion of the sales going directly toward an account to reduce tuition at a local parochial school. The response is amazing, just this program accounts for 1.6% of our annual sales and it has turned lazy customers into above average regulars. The school comments that Fox's has one of the most generous rebate percentages of all businesses, local or national. The steep discount justifies itself, as Fox's now caters most of the school's extra curricular activities.

Oliver concurs; he invested the food cost of his signature 'Twist' gourmet pizza towards The Mission for Area People Annual Dinner and gained 30 new customers. "We also increased our community's perception of what Bernie O's Pizza is about. Again, the common thread is that anyone at anytime could find themselves in a bad situation. Being involved in our community groups and their events has been one of the most inexpensive yet powerful forms of advertising we have done" Angelone observes that their contributions to the community have no doubt contributed to their double-digit growth over the last decade.

Riehle adds "The industry really has become much more essential to consumers' daily lifestyles now than any other point in time. Consequently, consumers are reticent to change their frequency patterns as well as alter their lifestyles fundamentally" Our job is to give them the reason to choose our pizzeria over the competition.

Scott Anthony

Fox's Pizza Den

Punxsutawney, PA

814-591-1489

First Url: About Scott Anthony

Second Url: Pizza and Prevention