The price isn’t always right: defying convention to improve Papa John’s bottom line
This Wednesday at the UK Searchconference winners of the UK Searchawards 2012 will present their cases. We already talked to a few of them and asked them to send us a summary of their winning case. Today the winners of the Best Mobile Campaign and Grand Prix Award NetMediaplanet describe their winning case: “The price isn’t always right: defying convention to improve Papa John’s bottom line”.
Papa John’s is the UK’s no.3 pizza take-away company. Their industry is highly competitive, with promotions and discount offers very much part of the staple strategy of the dominant market players.
It is well known that discounting can be damaging to profit margins of franchises. As such, Papa John’s were looking to move away from this approach. However the business were understandably wary about how this could impact both the volume of sales and market share.
Papa John’s set specialist Paid Search Marketing agency, Net Media Planet, the challenge to drive volume sales without offering discounts across its menu.
Research shows that when hungry people don’t want to cook and search for pizza, they are going to buy one. The team believed that if they tapped into the true customer mindset of being hungry – at the right time and place – volume sales could be achieved without the need for discounting.
The team challenged conventional wisdom and rather than discounting to drive sales, they identified and tapped into the customer’s needstate – hungry and not wanting to cook. For example, targeting hungry consumers on their mobiles and on their way home – when people think about what they want to eat.
Building a sound understanding of the consumer
Hungry people are susceptible to appetite-inducing message, and as the need increases typical barriers, such as price become less important in the purchasing decision.
The team researched the profile of the typical consumer, and targeted at times when they would be hungry and not want to cook.
Employing technology to ensure the message was delivered at the right time and place
Using Net Media Planet’s proprietary Mercury technology platform, campaigns were managed and run separately on desktop, tablet, mobile and iPhone to target consumers differently – people at work, commuting and at home.
This cross-device approach was deployed to ensure that the right messages were delivered at times when consumers were at their most susceptible to messages, and most likely to convert. For example, targeting hungry consumers on their mobiles whilst commuting, or later in the evening on a tablet, as people think about what they want to eat at home.
Through the technology platform, the team were able to run analysis and optimisation to improve time, device and geographic targeting.
Using appetite appeal to drive up the Average Order Value (AOV)
Operating in an industry where discounting is very much standard practice, the team recognised that revenues could potentially be lost from those consumers purely driven on price.
So the team used the campaign to encourage hungry consumers to buy additional side dishes when ordering their pizzas, to help increase the average order value and maintain overall revenue levels.
The team reviewed the menu, and used careful product selection to also promote side orders and desserts. To help create more bang for the bite, the technical search team worked closely with the copywriting team to create messaging with true appetite appeal. Naturally there was lots of taste testing sessions to identify adjectives that would excite and tantalise taste buds!
Through a combination of clever technology, traditional copy-writing and consumer insight, the team were able to drive volume sales for pizza delivery company Papa John’s without resorting to discounting.
- All objectives set by Papa John’s Pizza were met
- Relative to the best discounting campaign, bottom-line profit margin increased an impressive +139%
- On mobile, revenue per click increased +48% above discounting campaign levels
- Average Order Value increased +10.4%
All results beat those of the best discounting campaign. In our experience this has never been achieved before.
The strategy is now being used concurrently with a tactical discounting strategy.
What Andrew Gallagher, Marketing Director of Papa John’s UK said: “Through their creative and lateral thinking, Net Media Planet has delivered an effective new way of generating sales whilst reducing our depdence on discounting. It’s a powerful weapon to have in our marketing armoury. This kind of innovative thinking is what makes them such a great agency to work with.”