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Pizza Delicious made the same basic mistake we all do. They chose to advertise to people who don't know them, instead of marketing to people that do. This is

Pizza Delicious made the same basic mistake we all do. They chose to advertise to people who don't know them, instead of marketing to people that do. This is so simple, yet 99% of us don't get it. To convince someone new to buy from you takes times and money. Lots of it. But what do we do after those customers are made? We ignore them. So we spend all that money to win over new people and then ignore them. If Pizza Delicious had instead focused on getting their current customers to buy again, then their investment would have paid out. In fact, the response ratio would have been higher due to the fact that more people would have responded. But sadly, big media like facebook promotes their advertising like some sort of fix all. When in fact, it works like advetising on the newspaper. As expensive. As innefective. For most businesses, that is just a waste of resources. If Pizza Delicious is reading, send me an email. I will build you a marketing system that will not only be cost effective, but will work. PS. Before using facebook, or adwords ads consider direct marketing. If you don't have an idea, then drop me a line. I'll help you get your business off the ground.

mikeryan 14y ago
I disagree with your premise that marketing for new customers is a mistake. Its entirely dependent on your strategy. But also its much harder to increase margins on existing customers then it is to gain margin by getting new customers. Take a Pizza place - say an average customer gets 12 pizza's a year. Pizza D can focus on trying to get more business out of them but how many more pizza's do they sell? Can they maybe sell 3-4 more pizzas per customer per year? Compare that to an entirely new customer each which brings an average load of 12 more pizzas a year. Even if it costs twice as much marketing to convert new customer its still worth it. Ultimately it comes down to your business and your campaign and which type is more valuable.
- rmATinnovafy 14y ago
  Sorry, double post.
- rmATinnovafy 14y ago
  My point is that focusing the majority of resources on getting new customers from big media is a mistake. The focus should be to sell more to current customers ( for the pizza business), and to make those repeating customers bring in new people. This is from experience, and from wasting my own money. Just like Pizza Delicious did.
Gormo 14y ago
Building relationships with existing customers is a great strategy if you have lots opportunities for vertical growth, but what kind of opportunities does a small, local pizzeria have? People aren't likely to eat twice as much pizza in one sitting, or to eat pizza more often. They can also only raise prices so far before pricing themselves out of the market, and too many complementary products like pasta and canolis will just cannibalize their core business, since people can only eat so much food. Sure, it's more expensive to get new customers than to retain existing ones, but it seems likely that they need more customers if they want to sell more pizzas. Facebook may help with that by propagating their brand through existing customers' social networks; except, as the article points out, that doesn't appear to translate reliably into sales.
- rmATinnovafy 14y ago
  What other choice do they have? They went into the local restaurant business. All they can do is build a limited customer list that will only net X amount of profit. Once it is possible, they can systemise the whole thing and duplicate efforts by opening another locale. As limited as we may see it, this is how most big pizzerias came to be. I have a local chain that has been going for about 35 years. Only have they begun expanding in the last 15. They now have about 10 locales, and their revenue is close to 3 million/year. I do realise there is a bigger issue at hand, and that is that most businesses are started on a whim. Without any planning whatsoever. When these fail, their founders blame everything but themselves. Of course, this is human nature (as detailed by Dale Carnegie in his book).
  - Gormo 14y ago
    This seems to be the way most restaurants expand, probably precisely because their ability to open parallel revenue streams are limited. One local restaurant in my town used to sell ad space on its placemats, but that probably is a negative impact to customer perceptions of quality. Maybe a pizzeria could sell ads for other local businesses on its pizza boxes.
    - rmATinnovafy 14y ago

mikeryan 14y ago

I disagree with your premise that marketing for new customers is a mistake. Its entirely dependent on your strategy. But also its much harder to increase margins on existing customers then it is to gain margin by getting new customers. Take a Pizza place - say an average customer gets 12 pizza's a year. Pizza D can focus on trying to get more business out of them but how many more pizza's do they sell? Can they maybe sell 3-4 more pizzas per customer per year? Compare that to an entirely new customer each which brings an average load of 12 more pizzas a year. Even if it costs twice as much marketing to convert new customer its still worth it. Ultimately it comes down to your business and your campaign and which type is more valuable.

rmATinnovafy 14y ago
Sorry, double post.
rmATinnovafy 14y ago
My point is that focusing the majority of resources on getting new customers from big media is a mistake. The focus should be to sell more to current customers ( for the pizza business), and to make those repeating customers bring in new people. This is from experience, and from wasting my own money. Just like Pizza Delicious did.

Gormo 14y ago

Building relationships with existing customers is a great strategy if you have lots opportunities for vertical growth, but what kind of opportunities does a small, local pizzeria have? People aren't likely to eat twice as much pizza in one sitting, or to eat pizza more often. They can also only raise prices so far before pricing themselves out of the market, and too many complementary products like pasta and canolis will just cannibalize their core business, since people can only eat so much food. Sure, it's more expensive to get new customers than to retain existing ones, but it seems likely that they need more customers if they want to sell more pizzas. Facebook may help with that by propagating their brand through existing customers' social networks; except, as the article points out, that doesn't appear to translate reliably into sales.

rmATinnovafy 14y ago
What other choice do they have? They went into the local restaurant business. All they can do is build a limited customer list that will only net X amount of profit. Once it is possible, they can systemise the whole thing and duplicate efforts by opening another locale. As limited as we may see it, this is how most big pizzerias came to be. I have a local chain that has been going for about 35 years. Only have they begun expanding in the last 15. They now have about 10 locales, and their revenue is close to 3 million/year. I do realise there is a bigger issue at hand, and that is that most businesses are started on a whim. Without any planning whatsoever. When these fail, their founders blame everything but themselves. Of course, this is human nature (as detailed by Dale Carnegie in his book).
- Gormo 14y ago
  This seems to be the way most restaurants expand, probably precisely because their ability to open parallel revenue streams are limited. One local restaurant in my town used to sell ad space on its placemats, but that probably is a negative impact to customer perceptions of quality. Maybe a pizzeria could sell ads for other local businesses on its pizza boxes.
  - rmATinnovafy 14y ago