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Good Karma Does Not Come From Just Discounting

By Arjun Sen

I am excited to share Customer Karma secrets with you during the upcoming webinar hosted by Brad Brooks at SpeedLine Solutions. Before that I want to share with you one big insight I learned during my days as VP of Marketing and Operations at Papa John’s: 

I was doing a series of focus groups with loyal customers. In the focus groups, we presented the idea “You buy ten pizzas, and after that, you can buy pizzas for the rest of the year at a special price of seven dollars.” In those days, a large pizza was ten dollars, so this was a 30 percent off offer without any coupons.

I was sure this idea was a guaranteed win but an older woman in the group said, “Son, looks like you are not that smart. Not once, not twice, not just five times but ten times I have shown you that I can afford to buy your large pizzas for ten dollars. I had no problems with the price. When you reduced the price to seven dollars, I realized that earlier, you were really hosing me at ten dollars. Even now, you are making a lot of money at seven dollars. So, the deal made me question everything about your restaurant.”

Wow, us reducing the price and offering a sweet deal made people doubt the brand and, in fact, weakened the connection between her and our restaurant. After the price drop, she and other customers were visiting more often, as they felt addicted to the seven-dollar price point, but the connection was not strong enough to survive if I could not offer that seven-dollar price point in the future.

I asked, “What can I do for you that will make you come to me every time you order a pizza?” She was ready with her response. “Treat me special. Find out about me. Give me things that I want. Give me things that you do not give everyone else. If I am truly so special, why not put my pizza at the front of the line every time I order? Put me and the rest of the people in the group first.”

Times are tough, and it may not get easier any time soon. You may be tempted to consider discounting.  There is nothing wrong with discounting if you use it to get new customers to try your pizza. But moving your frequent users to discounted pizzas means you are not investing in good Karma and you are eroding your brand. Good Karma means focusing on the numerator (what customers get) and not the denominator (how much they pay). Focus on the numerator by:

  1. Getting to know each customer
  2. Understanding what you can give your customers to make them feel special
  3. And then pouring your heart into it

There are times some customers will order pizzas from other restaurants (sorry, it is true). That day they must feel that “this is not the pizza experience we get from our favorite pizza place.”  Those customers will come back to you, missing you.

In these difficult times it is more important than ever before to keep your eye on the long-term relationship with your customers. Get there by doing good Karma. The KPI (Key Performance Indicator) that you must look at now is the number of customers with whom you have long-term relationships with.

How to improve your customer experience by shifting focus. Register for the Webinar Now! May 21st at 11 PDT

Please share your success using this and any other ideas by emailing me at arjun@zenmango.com. Looking forward to talking to you on Thursday, May 21st, 2020.

 

 


Posted on Wed, May 13, 2020 @ 07:05 AM.
Updated on May 27, 2020 @ 6:07 PM PST.

Posted by Arjun Sen

Arjun Sen is a former Fortune 500 executive and a highly rated international keynote speaker in the Brand and Customer Experience category who has impacted brands to “win big.” At Papa John's, he led the 3,000-restaurant chain to four years of record growth. As CEO of ZenMango, he has made big impacts on major restaurant, service, retail, non-profit, and sports brands worldwide. Arjun is an acclaimed author of the book Customer Karma, a must-read for anyone in the customer service industry.

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Tags: Restaurant Marketing

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