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October 28th, 2009 by Lauren McKay

Bob Kraut, vice president of marketing communications, took the stage yesterday at Forrester’s Consumer Forum in Chicago with his iPhone in hand. After introducing Pizza Hut’s native iPhone application, he did what most attendees were hoping he would do. “I’m going to order a pizza to the conference,” Kraut said.

Kraut, whose background is in advertising and emerging media, spoke about Pizza Hut’s strategies in marketing to its customers — and its goals in connecting to customers in a fragile economy. There’s a new mindset out there that’s going to stick around, Kraut said. Not only are consumers more strategic in searching for deals and the best value for their dollar, customer confidence is low. A company such as Pizza Hut is especially linked to consumer confidence, he said. “Whatever we can do to lessen anxiety, give more choices, and give more value, Pizza Hut is prepared to do,” he told attendees.

Kraut then shared Pizza Hut’s 4 Key Strategies in marketing to its customers:

1. Address value.

Nothing illustrates this more than the restaurant’s launch of the Big Eat, Tiny Price” campaign. With the special, customers can dine for only $5 on dishes such as the new Pizza Stuffed Rolls and the P’Zone Pizza. “We needed to have a low price-point entry into the marketplace,” Kraut said. Pizza Hut’s online customers spend, on average, $2.50 more than the offline customer. Add-ons and side dishes are very popular with people ordering online.

2. Improving and increasing menu variety.

Pizza Hut’s marketing organization seeks to stimulate the market every four to six weeks. A lot of times that means introducing new menu items. It has been rolling out new locations of its WingStreet store and has seen favorable results. Kraut said Pizza Hut expects its wing business to double in the next two years.

In addition to wings, Pizza Hut has made a play for pasta, as well. “We like to stand for America’s favorite foods,” Kraut said. Pizza Hut found a strong correlation with those that eat pizza and those who eat pasta. People who eat pizza four times a month, tend to eat pasta on a regular basis, as well, he said.

3. Lead in access.

“Pizza Hut has been early and often to embrace emerging media,” Kraut said. In June, the chain launched an iPhone App, “The killer app for your appetite.” The interactive application allows customers to order pizza there — or by text message. It’s been wildly popular. They are at about 600,000 downloads and currently hold the #2 spot (behind Starbucks) in lifestyle applications on the AppStore.

How does this translate into more business? Pizza Hut sees 30 percent of e-commerce sales coming through the iPhone. Kraut said as the company explores other mobile platforms, he anticipates that mobile will continue on the path of being a strong channel for customers.

4. Get in the new media conversation.

Pizza Hut is increasingly embracing emerging media through areas such as viral video. Although it’s difficult to measure, he said customers can expect more videos like the one below — A spoof of a commercial actor flipping out.

The company made news early this summer with its search for a Twintern – an intern whose main responsibility would be to create a Twitter presence and alert the pizza chain on what’s happening on the social Web. Pizza Hut was so pleased with the Twintern’s performance that it offered her a full-time position. Now the search is back on — this time trying to create a title for the Twintern’s full-time position.

Kraut said that Pizza Hut’s Web sales continue to grow. In a few weeks it will launch a new Web site. It’s e-commerce platform is unique in that it offers customers recommendations for products they might like. It also, Kraut said, is the only pizza site to remember customers upon repeat visits. What’s the impact of new media on the in-store Pizza Hut experience? Kraut said he reckons it positively affects it, although he doesn’t have the stats to back it up.

Just as Kraut was wrapping up his talk, a surprise guest headed to the keynote stage — a Pizza Hut delivery man. Kraut accepted the medium pizza and gave hungry attendees a bit more to chew on: Upon leaving the ballroom, they’d find free Pizza Hut Chocolate Dunkers waiting for them.

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