Cooking Up A Deep Dish Database
Could any business be more low-tech than the local pizza parlor? Don't suggest that to Gary L. Mead, a trailblazer in Lompoc, Calif. Such giants as Domino's, Little Caesar's, and Pizza Hut have used mass marketing to gobble up nearly 48% of the $18 billion pizza business. But Mead is turning the tables, using database and direct-marketing technologies to personalize his marketing--and keep customers returning to Mi Amore Pizza & Pasta.
The 34-year-old restaurateur's secret: a marketing database that tracks customers and purchases. If regulars haven't stopped by in 60 days, his PC-based system spits out a postcard to lure them back with a discount. The $10,000 system even lets him practice "cross-selling" techniques--such as suggesting a new pasta dish to pizza lovers. Every Christmas, his database cranks out a list of his best customers for personally signed cards. "What we're trying to do is establish an individual relationship with each customer," says Mead.
WHAT RIVALS? Sound pie-in-the-sky? Since Mead bought the pizza shop in 1991, revenues have climbed more than threefold, to $1 million. His delivery database now boasts 8,500 customers--all in a town of just 11,000. What's more, the delivery business is rising 25% to 30% a year.
Mead caught the technology bug while managing a small group of restaurants. When recession struck in the late 1980s, the group's point-of-sale system couldn't even identify key customers. So Mead hunted for a package that did. He found it in a pizza-shop system sold by Rapidfire Software Inc. of Beaverton, Ore. Employees simply enter the phone number into the cash register and a computer automatically builds a database.
Next on Mead's techno-menu: an ATM-like card that awards points redeemable for food in the restaurant. The idea? To complement the delivery database with another database specific to the sit-down restaurant business. Customers receive a card in exchange for completing a survey with their names and addresses. Boasts Mead: "I don't pay the least bit of attention to the competition." Instead, count on the big pizza chains to start paying attention to his marketing tricks.