Why giving away free pizzas hasn’t worked for us

Comments 6

Everyone thought the idea was as genius as it was simple. We all believed in our product and expected that after trying our pizza, nobody could fight the temptation to order and devour it again. So half a year ago, we threw our cap over the mill and offered a free pizza to literally each Oxonian who had never ordered from Dodo Pizza before.

The thinking behind this project, dubbed Dodo Virgin, was that the promo would bring us new customers, generate word of mouth, and substitute any other marketing activity for our pizza delivery in Oxford. Instead of hammering home in ads and promos how tasty our pizza was, we wanted people to try it.

This inspiration came from a time when we started in Oxford and offered free pizzas to our first 500 beta tasters. It worked out nicely for us back then. Why not repeat the experiment on a scale of the entire city?

We set up a system to track new customers, made a simple website for the Dodo Virgin project, and promoted it on our Facebook page. In just three months, we shut it down.

Almost everything worked as we expected. People were signing up. Pizzas were being delivered. But we couldn’t see any impact from the Dodo Virgin project on our daily sales. Considering all the headaches we experienced with every Virgin order (that had to be managed manually), we realized that it wasn’t worth it.

A week ago, we took time to analyze our data and figure out what went wrong with our groundbreaking marketing strategy.

The program was active for three months—December, January, and February. 446 people took part (102, 272, and 72 respectively). You can imagine we didn’t have a hard time attracting participants for Dodo Virgin, so these numbers reflect mostly our ability and desire to handle the Dodo Virgin orders. When we felt overwhelmed with them, we paused our promo.

33 Dodo Virgins returned once to place their second order. 20 more ordered from us three times or more. The rest just enjoyed their free pizza—and never came back. For now, estimated lifetime value is $3.85 for every Dodo Virgin and $32.85 for the group of returning clients. All the Dodo Virgins placed orders for $1741. We can roughly estimate that we spent $10 on every free pizza ($4460) and $1000 on the landing and ads. So our loss is around $5000.

These calculations might be not as bad as they look at first. Many people use different phones and addresses to place orders, so we likely have missed a dozen or two returning clients. Some will come back as paying customers later—the three months that have passed since the campaign’s end isn’t a long enough period to accurately calculate the lifetime value of a customer. Still, the numbers aren’t impressive, and we won’t try to sugarcoat it.

The promo was a flop. What did we miss?

Now it’s clear that we could have done more to build a relationship with people participating in the Dodo Virgin promo. We didn’t do anything to help them make their second order—didn’t offer them a small discount and didn’t even send them a tiny e-mail asking about their experience with us or inviting them to order again. That was a mistake, though I believe that the main problem could have been related not to the promo’s mechanics but to the promo’s idea itself.

Our artisan pizza, made with high-grade, fresh ingredients, is a bit more expensive than the ones you order from our major competitors in the delivery business. We offer the Supreme for $16, while Papa John’s does it for $14 (and Domino’s is even cheaper with its promo prices). We’re aiming at the people who can pay a bit more for a much better product. The Dodo Virgin promo, on the other hand, attracted mostly people who were looking for bargains.

As much as they enjoyed our product, most of them weren’t ready to pay an extra dollar or two for it. Our aim to cover all the city with our promo could have been the wrong shot in the first place.

I have a theory that making a pizza completely free was wrong too. After you’ve gotten a product for nothing, it’s mentally hard to start paying for it. That’s why many pizza joints offer one additional pizza for free only if you buy one. We should have taken that into account.

Lessons learned: have a plan for a promo’s afterlife, know your audience, and most importantly, don’t let your customers get a promo product without paying at least something.

 

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Comments (6)

  1. Actually Dodo not 1–2 bucks more expensive…it’s almost twice as expensive. Since I don’t live in Oxford, I’m usually buying Domino’s 3-toppings (I prefer all meats) large pizza for 7.99, which comes to $9–10 with taxes and small tip. Or Little Caesars “3 meat treat” for even couple bucks less (they also doesn’t charge tips) . Compared to $16 for Dodo Meats, which comes to 19–20 with taxes and tip. Yes, Dodo has far more meats on the pizza than Dominos and it’s far more tasty than LC, but for some people that might be not enough.
    Hopefully I would be able to visit your second location more often and will compare it with other competitors on the same day.

  2. I received the free pizza and it was good but not great. The quality is recognizably different but not significantly greater than a run-of-the-mill pizza. I would love to see you succeed but for the price and for my taste, Dodo’s wasn’t for me. I’m not sure that I would go out of my way to receive a second free pizza, but the dine in location my make a difference! Overall, pretty good but not great..

  3. Andrew, I’m really sorry we didn’t impress you as much as you expected. Our ingredients are significantly better comparing to the big chains, but it is still a delivery pizza meaning it is really good right after the oven and gets worse with time, for sure. Would you mind me asking, how long was the wait?

  4. Umniks, we ain’t even trying to compete with Little Caesars. People who like Little Caesars would never ever become our customers, unfortunately. We stand for the quality of the ingredients and great service. Little Caesars stand for price only.

  5. I’ve ordered from Dodo’s and it was pretty darn good. I would probably put your pizza in the top 3 in Oxford. The reason I haven’t ordered again is simply the fact that I just didn’t get full. I don’t mind paying for quality pizza ( I drive to Sardis for pizza at least once a month) but I expect to get enough to eat and maybe have a couple of slices left for lunch the next day. Just my 2 cents but $16 should buy me a nice sized pizza.

  6. The pizza is overpriced. I understand the demographics of Oxford has more disposable income, but there are too many other options in town to compete large scale at the current price point. Most people like the pizza, but just about everyone says it’s too pricey. Either make the pizza a bit larger, drop the price a couple dollars or stall in growth. Love the DoDo Bird!


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