This week I want to get really specific with some tips on how to sell merchant services and other services to certain small business types. We are going to start with Pizza Shops. I have sold a lot of Pizza Shops over the years and so today I am going to share with you the things that Pizza Shop owners want for payment processing, web design, point of sale systems and payroll services.
Introduction to Pizza Shops: Most pizza shops process $15,000 to $30,000 per month in credit card processing volume with an average ticket size of around $25.00 depending on their model. If they have a focus on adding menu items like Salads and Pasta, they will average closer to $30.00 per sale (Average Ticket Size) and if they are strictly pizza, they will be closer to $20.00 average ticket size. One thing that has a big effect on a pizza shop’s revenue and profits is larger parties. Many pizza shops are strategically located near school sports fields or colleges so they get the big groups to come in. Other pizza shops target the local business lunch crowd and do delivery at lunch time.
Pizza Shop Owners are usually very proud of their pizza and the way it is made, what oven they use and their specific niche in the local community including what schools or businesses they are networked with to increase business. Pizza shops are also highly likely to be multiple location businesses, more on how to sell multiple location merchants in my Friday post but, just be aware that many pizza shop owners are actually franchise owners or have started multiple locations either personally or with other partners.
Pizza Shop Owners spend a lot of money on traditional marketing. Most spend at least $3,000 per month on billboards, mailers, yellow page ads and other traditional forms of advertising. Pizza Shop owners are very much aware that they need to upgrade their technology to include text marketing and online ordering. These are two necessities in today’s pizza shop market and while most pizza shop owners would agree with this statement, less than 5% of all independent pizza shops have both of these systems in place. Many Pizza Shop owners have spent a lot of money on their website and are probably very proud of it. It is not uncommon for them to have spent $3,000+ on a decent graphical website which, for a pizza shop is fine. If they simply added online ordering to it and added a few SEO pages they would be all set (more on that in a minute)
How to Sell Merchant Services to a Pizza Shop Owner: Focus on two things. First of all, focus on the transaction fee. Pizza Shops have a large volume of small transactions. A Pizza Shop doing $20,000 per month in volume with a $20 average ticket size is processing 1,000 credit card transactions per month. Every penny you can shave off the transaction fee is $120 per year in additional profits. Explain this to them and look at their statement to see what they are paying per item. Don’t forget to include NABU (Network Access Brand Usage) fees, auth fees, gateway fees, surcharges and any other fees the current processor has in place. No matter what you do, it is tough to get the total per item fees much below $0.30 because the interchange cost for a check card transaction alone is $0.21 and the NABU fees currently range anywhere from $0.025 to $0.06 depending on which processor you sell for, then you have to add in the transaction fee costs and make a profit. However, it is very common for pizza shops to be paying per item fees of $0.35+ so there is usually room to work.
Secondly, pitch the idea of an internet connected credit card terminal if they don’t already have one. This single tip will save them valuable time at the counter. I convinced one of my 3 location pizza shop clients to install an internet connection at each location, specifically for this purpose and he tells me it was one of the best tips I gave him. Instead of waiting 15 to 30 seconds for the terminal to dial out while a line formed out the door and people got tired of waiting, he now processes transactions in 1 second over an internet connection and brings in more revenue with happier customers. If they have only one phone line and they are sharing it between the phone to take orders and the credit card terminal and you get them to hook up the credit card machine to the internet, you will be the hero of all the employees and the owner, trust me.
How to Sell Web Design to a Pizza Shop Owner: I already mentioned this before but, online ordering is really a must in today’s pizza industry. I like to ask pizza shop owners if the knew that Domino’s does over 50% of their revenue through online ordering. If they already know about it, they are sickened by the fact that they don’t have this and if they don’t know about it they are amazed. The truth is that their customers are ordering pizza online from the comfort of their own home, the only question is if they are ordering it from a competitor or from their shop. With our web design reseller program and the “Sync” solution that we provide our clients, we can set up online ordering for any pizza shop owner which allows people to order online and then have a receipt printer at the kitchen printer in the pizza shop for either delivery or pick up. We are just about done with our new free POS Sync offer for restaurants and pizza shops and we will have this ready to roll out in a couple weeks. This means you will be able to offer your clients a complete solution with only a small set up fee, no need for financing or having thousands of dollars up front for web design work or POS Hardware. We provide a month to month service that includes the online and in store presence as well as our sync solution and unlimited support.
One other tip I will give you that will bring in a lot of revenue for your pizza shop clients if they have our web design service. If they create (or have us create) a few web pages about their business that have a title of “Best Pizza in (Their City)” or “Best Pizza Shop in (Their City)” in which they talk about why they are the best, this page will rank very well in search rankings as a general rule. People search all the time for “Best Pizza in (My City)” and if they have a page that is specifically targeting that keyword, they are sure to get some business from it. I would even create similar pages with that keyword for towns nearby using testimonials like, “Why (Nearby City) Residents Believe We have the Best Pizza in Town” and then use the keywords throughout the testimonials of customers from that city.
How to Sell a POS System to a Pizza Shop Owner: I already covered a lot of tips above but, the hot buttons for this item start with order accuracy. Many pizza shops have employees writing up orders which are often difficult to read and consequently get messed up in the kitchen, leading to poor customer satisfaction, wasted time and wasted food. A good point of sale system with a kitchen printer will solve this problem. Also, a pizza shop will need a deliver module. Don’t ever sell a POS System to a Pizza Shop unless it has a deliver module where the pizza shop owner can track their delivery orders separately from their in store orders. This is a crucial piece of information. My last tip on the POS is in regards to payroll, so let’s switch to that.
How to Sell Payroll Services to a Pizza Shop Owner: At the time I am writing this, we have put our payroll services program on hold. We are doing a new roll out during our kick off meeting in January 2015, where we will include an up front bonus and residual income, just like all of our other services so you will not want to miss that. I have to bring this up here because Pizza Shop Owners have a unique challenge in this area. They have lots of employees but the average hours worked per employee is very low. They have delivery drivers that might only work 3 or 4 hours per night, 2 or 3 nights per week. They have part timers that work evenings, etc. Because of this, they spend a lot of time on payroll processing and they usually don’t get this done very accurately. They might have an old punch card time clock and they know that other employees are punching in and out for their friends who arrive late and leave early.
The numbers here are staggering. Let’s say they pay an average of $8.00 per hour, plus taxes, etc. we will call it $10.00 which is very conservative. Let’s say they have 20 employees (Again, a low number for a pizza shop) and let’s say that each employee is cheating the system by a half hour per week which is ridiculously low for a traditional time card system. That means the pizza shop owner is paying for 10 hours of work each week that is not actually being worked. That is $100 per week or $5,200 per year and the real number is probably closer to $20,000 per year, wasted from inaccuracies in payroll tracking. A POS System can solve this problem on day 1. We provide employees with a number card that they must use to clock in and out. This unique log in system is very difficult to trick and results in significantly more accurate for HR management. A good POS System like the one we offer, shows our clients what time their employees showed up, went home and what they did while they were there. It becomes a lot more difficult for someone to clock in 10 minutes early and then sit around on their phone when they know their activity is being tracked.
The real benefit here with payroll is also a huge time and aggravation savings for the business owner. Once we roll out our payroll service partnership in January, you will be able to provide a pizza shop owner with a complete solution. They will have the POS System where their employees clock in and out. They will be able to export and send the hours report to our payroll provider. The payroll provider will do direct deposit, provide online W2 and paystub info for employees, file taxes on behalf of the pizza shop owner and much more. Business owners spend hours and hours each week answering payroll related questions and helping employees make time clock corrections, our system eliminates about 95% of this work which business owners love and of course it deepens your relationship and value to the business owner while also increasing your income.
I hope this article gave you some ideas and insights to help you sell pizza shop owners in your local market!
James Shepherd
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