PMQ: WAS THIS INSPIRED BY FAST-CASUAL
PIZZERIAS THAT USE A SIMILAR PRICING MODEL?
Iversen: Yes, that was a place of inspiration. In many ways,
we’ve been doing things that the fast-casual pizza players
have done for a long time, such as offering unusual toppings like tater tots, macaroni and garlic-roasted tomatoes.
PMQ: HOW DID ONLINE ORDERS PLAY INTO THE
Iversen: We do about 50% of our transactions online
and noticed that online consumers were customizing
their pizzas even more than those calling in. Just like in a
fast-casual environment when you walk down the line and
tell them what you want, you do a similar thing online
when you choose toppings. It’s much easier to create what
you want when you aren’t restricted.
PMQ: HOW HAS YOUR BOTTOM LINE BEEN
AFFECTED NOW THAT CUSTOMERS CAN GET
Iversen: It’s been great. Our transactions (since the pricing change) were up about 3% versus the prior year. Our
order counts are up in a time when the entire restaurant
industry is fighting for order counts.
PMQ: HOW HAVE CUSTOMERS REACTED?
Iversen: The change has improved the value perception
for our customers. We’ve seen not only new customers,
but current customers coming back more often. They’re
reporting to us that they think the value is better because
we’re unleashing them. We’re saying, “Do what you want,”
and we’ve priced the menu so that it works.
PMQ: HOW HAS THIS PRICING MODEL AFFECTED
YOUR FOOD COST?
Iversen: We studied this quite a bit and tried the unlimited toppings in a few test markets prior to launching it
across the system. Our ideal food cost changed by about
half a percent. Not significant.
PMQ: WHAT’S THE AVERAGE NUMBER OF
TOPPINGS THAT CUSTOMERS ORDER?
Iversen: Prior to the change, the average number of
toppings per order was probably two to three. After the
change, it increased to three to four. It didn’t change dramatically, but perception-wise, people think they’ll go
ahead and add that extra topping they wouldn’t have
before. It’s about giving the customer what they want
and eliminating the feeling of being nickle-and-dimed.
“We studied this quite a
bit and tried the unlimited
toppings in a few test
markets prior to launching
it across the system. Our
ideal food cost changed by
about half a percent. Not