Aggregators Aren’t Stealing Our Data, Says Papa John’s CEO
Papa John’s International is riding a wave of optimism, reporting on its third quarter earnings. The company saw consolidated revenues increase $18.5 million, or 4.8%, for the third quarter of 2019 compared to the third quarter of 2018.
Papa John’s chief executive officer, Rob Lynch announced the details of the positive and “disproportionate” growth during an earnings call on November 6, 2019. Lynch provided forward-looking insight into the company’s strategic goals as well as leadership changes to streamline the executive leadership team and position the company for further growth.
Papa John’s newly launched rewards program, Papa Rewards, helped the company-owned restaurant revenues benefit from positive comparable sales of 2.2% and the favorable impact of the expiration of customer rewards associated with the Papa Rewards loyalty program.
Lynch reveals the company needs to continue to optimize its loyalty program as one-to-one marketing and other data-driven initiatives become a bigger part of Papa John’s go-to market strategy.
“We think the competitive environment is very aggressive,” Lynch says. “We track it closely, but we believe our strategy is very different. We’ll continue to focus on food and delivering great service support those with our technology platforms.”
Lynch himself is relatively new to the CEO role, taking over the position after the resignation of previous founder/CEO, the eponymous John Schnatter, whose tenure was clouded by controversy.
Among those leadership changes, Papa John’s CFO, Joe Smith will exit the company in 2020, planning on staying through until the spring. The search for his replacement is underway.
Other changes include the addition of Max Wetzel as chief commercial and marketing officer, previously with Heinz, starting on November 18. Wetzel will be tasked with leading “the company’s efforts to reestablish the superiority of our pizza with consumers across our various platforms.”
Karlin Linhardt will be exiting his role as chief marketing officer. Jim Norberg has been named chief operating officer, North America, formerly SVP, chief of restaurant operations. Jack Swaysland will remain chief operating officer, international. Mike Nettles, chief operating and growth officer, will also be leaving the company.
During the call, Lynch reveals that the company will “focus on building an innovation culture” as the company works to overcome its reputational issues and continues to put the emphasis on delivering good food.
“First and foremost, Papa John’s is a food company,” Lynch says. “We have a long history of technology leadership in the pizza delivery industry and we will continue to use technology to better help serve customers and improve operational efficiencies while using that technology to inform our decision-making.”
The company deviates from many of its competitors in its full embrace of third-party delivery aggregators, adding UberEats to its existing partnerships with Postmates and DoorDash.
“We don’t see operational challenges partnering with aggregators,” Lynch says. “That’s why we integrate with them so the orders come in seamlessly and show up as an UberEats, DoorDash or Postmates order. We see that their drivers show up and deliver in a timely manner consistent with our drivers. We are working with them to make sure that they are meeting our standards and that we are operating in a productive way so that we both benefit.”
While Lynch doesn’t credit third party partnerships with driving the third-quarter growth, he is looking at expanding the footprint. Continued investment for the future will be to increase customer acquisition and productivity also improving throughput.
In another departure from industry sentiment, Lynch does not see the idea of who owns the data – restaurants or third-parties – as an issue. Lynch voiced his view that about 85% of customers already have an aggregator app on their phone. “The idea that the only way aggregators are going to get our data is seeing what our customers are ordering – doesn’t ring true for us,” he says. “Almost everyone will have an aggregator app on their phone. We don’t believe them stealing our data is what is going to transpire. We believe there is an opportunity for us to partner with these aggregators and mutually benefit.”