We’re back

Comments 11

As you’ve probably already noticed, we disappeared from this blog for quite a long time. The reason is that we’ve been busy. Oxford is a college town in Mississippi where things get crazy during the fall. Students are back, and even more importantly, the football season takes off. Now it’s over, and we can finally catch our breath and sum everything up.

We started getting ready for the football season in the summer. There were three main areas we focused on: IT, production capacity, and the team.

Our website (dodopizza.com) wasn’t ready for the enormous amount of orders coming in at the same time (it happens right after the home game). Our IT team had to increase the capacity of the website so it wouldn’t crash during rush hours. The tracking system in the kitchen has also been improved significantly.

Each pizza order goes right to an iPad in our kitchen so that a pizzamaker can see what he/she is making. Half a year ago, our tracking system wasn’t fast enough. Things changed in August. Now we can choose several pizzas at a time and everything works so freaking fast!

In July, we bought new kitchen equipment for the kitchen. Before that, the main pizza table didn’t have a space big enough to fit a huge sauce pan. We also didn’t have a shelf for the pizza cutters. We had only one heated shelf for the ready-to-go orders (and used to run out of space often). Small things of this kind matter because they impact production speed.

We desperately needed more members to join our team. At the same time, the experienced people had to oversee the newcomers and take on extra responsibilities. In October, Jessica Perkins became our GM (general manager). Jessica joined us as a delivery driver, then she worked as a pizza maker and shift supervisor. Jessica has a lot of experience in the industry, working several years at Jimmy John’s and running her own restaurant.

In November, we implemented a new shift supervisor assessment form. The shift supervisor is a key position at the store because the overall success of an enterprise is based on the daily success of every single shift. Now the performance of each shift supervisor (we have five) is assessed four times a month by the GM. Each assessment is an opportunity to improve minor things that matter a lot in our business.

Jessica Perkins, our new GM

Now the results. On the busiest day of the season, we made almost one thousand pizzas.

Our sales in October were $42,000 with a resulting EBITDA of 19.5%. That’s a great surge compared to $31,700 in August.

(For more details, check this spreadsheet which we made for the purpose of managerial accounting.)

However, not everything turned out as well as we expected. We thought that the season would grow our client base significantly and we’d make more sales not only on game days, but on weekdays as well. That didn’t happen; our Mondays still bring us $600–800, as they did before. And all that despite the fact that students got back for their classes and the Oxford population almost doubled since July.

It makes us think that Dodo Pizza isn’t that popular among students (yet), and we have to work on that and maybe rethink our marketing strategy. Getting in the FLEX system might help. As we’ve learned, students tend to save cash to spend on recreational activities (e.g., bars) and spend only their FLEX money on food. So if you’re not in the system, you’re out of the game.

The general population can’t be disregarded either. We can’t say that every single person in Oxford knows Dodo Pizza. So we’ll have to cast our marketing net much wider.

What do you think we should do?

Actually, a few projects are already in the works. But I’ll save them for the next post (which is coming soon).

Comments (11)

  1. Quite simply, your pricing needs to be more aggressive to capture the college crowd. The places near the university here all do super late night delivery and offer $5 14” large pizzas (and they are killing it!). Also look to instagram and snapchat marketing as the younger demographic only uses facebook minimally.

  2. Alex, thank you for the opinion! Unfortunately, we can’t offer $5 14” large pizzas simply because we use fresh expensive ingredients. We’d go out of business immediately. Therefore we only compete for those who value quality first of all.

  3. I am a huge fan of Dodo and your artisan pizzas, but have you thought of offering a late night cheap pizza aimed at college students? Big cheesy and cheap. Also like just have a phone. Its weird you don’t have phonw ordering. Oxford not Silicon Vallej

  4. Lots of reasons actually. It is all but impossible to thrive serving 15 USD designer pizza in a small college town in Mississippi. What were you thinking? This is not LA, this is not Portland or Boulder, guys. Wake up already.

  5. Thank you, Dodo Fan! We do take phone orders now. We’ve recently changed this decision. 

    Denis, what do you mean “impossible”? The store is profitable so it is already not “impossible”. As for increasing the amount of orders, it is only a matter of time and marketing.

  6. Alena, your business model is franchise, right? You came to the US to sell your franchise — designer pizza along with the best integrated IT solution. But if your football days sales are deducted — you barely make it. Sorry. You can tell me whatever you want — no amount of time and marketing will materially increase your revs in Oxford. Because you sell designer pizza in a small college town in Mississippi. You did great with local stadium, I give you that but for potential franchisees this has to be discounted, sorry. And without these sales — you are doing substantially worse than your main competitors back in Oxford. Try opening Michelin restaurant in Oxford. There much less difference between it and designer pizza believe me. You should have targeted different places for your pilot joint — with well-off residents as you target audience — Boulder, Portland, Scottsdale etc I understand that you Oxford was chosen primarily because of your friend-editor of that Pizza Magazine but that was a mistake. JMHO.

  7. One more thing: ever wondered why Porsche or any other premium auto brand does not have a dealership in Oxford, Mississippi? And you sell exactly “Porsche” among pizzas.

  8. Denis, I won’t argue with that statement. We’ll work longer and we’ll see. It is too early to come to any conclusion right now. We’ve been in the market for 8 months, our competitors — for decades. It would be really strange if we started having more orders than them from the day A. Our pizza isn’t even close to being “Porsche”. Does $13 for 12” Pepperoni really look like “Porsche”? You can check the prices at Papa John’s, for example.

  9. Alena, to make things clear — there are basically two options why your revs are stagnating when they should be rising into stratosphere especially after these football games — it’s either a problem with a product itself or rather a problem with it’s pricing. Simple as that. Your “free pizza” for every new customer won’t make expensive pizza cheap for those who consider it expensive but will surely impact your margins. That is how I see it.

  10. I would agree with you but the reality isn’t that straightforward. Dodo Pizza in Oxford is an experiment, we’re constantly changing different variables to see how the market is reacting. We ain’t launching franchising now or anytime soon, we are building a strong corporate chain at first. Yes, some of our big names competitors make more in sales. I know that for fact because we keep in touch with some of the owners. But at the same time they make less in net profit sometimes because of the huge investments in traditional marketing. Moreover, they also have to hire more people to make the same amount of money per day that we make just because they have more cheap orders. And the bottom line is always profit, not sales. Also, if what you are saying about poor college town were true, why would we have dozens of super expensive fancy restaurants on the Square usually packed at night? An average check there is $50 per person and I barely see them empty. It might not be students all the time, but local people and students have parents who come visit. So, I am not trying to make things look prettier than they are — we share all the numbers with the public but I believe in our business model and we’ll make it work.

  11. Alena, thanks for this thorough answer. I root for you and Dodo Pizza’s success, have no doubt about that. I know you make a better product than your competitors — at least local ones. So the problem is not in the quality of the product. You have excellent operational management — no problem here. What’s left are basically a pricing model and range choice. I already see you increase the latter and can’t be bad. Means you are listening to your customer and maybe partially abandoning this “paradigm shift” attitude everywhere — no phone orders, narrow product range etc.