How Customer Feedback Shaped Toppers Pizza’s Off-Prem Strategy
Adam Oldenburg’s journey to CEO started 18 years ago. When he was a student at University of Wisconsin - Whitewater, he took a job delivering pizzas at Topper Pizza.
“Within six months, I was hooked,” he said. “I had a great manager. In my mind, I knew I could own my own Toppers. My boss told me, 'If you want to own a Toppers, you better get in the management program and learn how to run it.'”
Oldenburg took the jump and became an assistant manager. In his early 20s, the future CEO had big plans to run the company someday. Along the way, Oldenburg was named Manager of the Year and continued working his way up the Toppers’ ladder: supervisor, corporate operations director, VP of operations, Vice President of Pizza People and more. He oversaw operations, marketing, training and acquisitions. He also became a franchisee; today he owns six Toppers franchises.
Oldenburg was named CEO in May 2023, succeeding founder Scott Gittrich, who was at the helm for 30 years. The company has 70 locations, including 16 company-owned stores.
"I've gotten my ass kicked along the way many times,” he said. “In business I have had some challenges; economic conditions are definitely one of them.”
Responding to Customer Feedback
Since being named CEO of Toppers, Oldenburg has seen consumers rein in their pizza spending. “We saw this coming. I've been in the pizza business for 18 years; I've watched a couple of economic downturns. In these time periods when the wallets start tightening, people are fixated on price,” he said.
Last fall, Toppers wanted to understand why previously loyal customers had abandoned the brand. Oldenburg and seven of his colleagues divided up a list of lapsed customers and called them. "The success rate of cold calling customers nowadays is low, but we did it anyway. We left a message, ‘Hey, we'll get you some free pizza. We just have a couple of questions.’"
The promise of free pizza swayed nearly 400 customers to return the call. Combined with data, the customer feedback “really helped us decide what our strategic priorities were (for 2024). We took four price increases during COVID. We could not keep up with the demand for our products,” he explained. “You think you're invincible during those time periods; every good thing can come to an end quickly.”
Customers repeatedly said the brand had become expensive and cited problems with delivery wait times and no-shows.
“When your ears are open, you can learn a lot from your customers,” he said.
As a result of its data analysis and customer feedback, Toppers made the strategic shift to promote carryout. In February, Topper launched a carryout promotion: one topping pizza for $7.99, or $9.99 for a three-topping pizza. “This covers 80% of our entire menu at a discount,” he said.
Customers are opting for pickup for the cost-savings. Even before the promotion, delivery sales had been on a “a really fast slide” from high to low demand, he said. “...Our carryout has gone through the roof because people are changing their spending habits. We're trying to make it more profitable for us to hand a pizza over the counter at a discounted price than doing delivery,” Oldenburg said.
KPIs
Toppers thrived during COVID; new customer counts have been “down double digits” year over year for the last four years. “Since we introduced our carryout specials, we're back to (2021) customer counts.” However, the pizzas are not as profitable as they were three years ago. It is critical for Toppers to continue picking up new and repeat customers.
“Carryout comp orders (year-over-year) have been up anywhere from 20 to 30% which has been able to mitigate some of the losses that we're seeing on the delivery and the aggregator side. We've only been doing it for like 6-7 months now, but we've been able to see that our frequency for those new customers has doubled,” Oldenburg explained.
The average customer comes back once every 80 days, and for those new carryout customers, they come back once every once every 40 days. They are using carryout far more frequently. Even though there is less of a margin, we’re doubling the frequency of that margin. “Times 2 is better than the margin we were getting off the frequency of our original customers,“ he said.
Toppers continues to solicit feedback from its customers, emailing a survey after each order. All of Toppers’ carryout metrics -- from accuracy to freshness to friendliness -- are overwhelmingly positive. “Not only are we driving more frequency, but also it’s a better experience for our customers,” he said.
Building a POS
Toppers’ in-house team of developers built its proprietary point-of-sale, PizMet. “The name, a combination of pizza and kizmet, means we control our own destiny," he explains. "We basically get to decide on a regular basis what we're doing with our technology, how we're going to differentiate ourselves."
It took the Toppers team about three years to create PizMet, which launched system-wide in 2019. “We've had a lot of really good wins with the point-of-sale system.” The in-house IT team is very responsive, working in concert with operations, marketing to anticipate and to respond to needs.
"There are a lot of things on our list. It comes down to prioritizing and how we're executing them,” he said. Toppers plans to add Google Pay and Apple Pay.
Delivery Goals
Based on customer feedback, Toppers realized it needed to find a solution for delivery, especially for those stores that didn’t have in-house delivery drivers.
“With current labor challenges, it is easier and more reliable to contract out delivery. You need some type of failsafe in this type of economy where it's not as easy to call up another driver," Oldenburg explained.
Toppers has contracted with Nash, which automatically dispatches delivery drivers on Toppers' behalf. The solution is integrated into its POS via an API.
"We are very data-driven. We know how long it takes for deliveries to be taken to the customer, how long it takes for the orders to be picked up,” he explained. Average pickup time from dispatch is 10 minutes. “The pizza is going through the oven in 6 minutes. It's sitting there for 3 or 4 minutes before that partner picks it up. And that might be better than what we can do today with our own self-performed delivery," he added.
Marketing in the Digital Age
How Toppers markets to consumers has shifted substantially. Gone are the days of database mailing and saturation mailings and billboards.
“We're on Uber, DoorDash, Grubhub, and we have toppers.com. The face of our brand lives digitally in front of customers, and that's the way that we market to customers,” Oldenburg explained.
“We're still a very small and nimble company. We believe in local store marketing at a very high level. There's no better marketing tactic than going to schools and giving teachers coupons for free pizzas for Teachers Appreciation Week, or going to the hospitality for Nurses Appreciation Week, partnerships with sporting events, walks, charities, etc. All of those are really important to us. We are never going to navigate away from that, but we have definitely navigated away from the mail,” Oldenburg explained. Social media marketing has also changed.
Facebook was "the big thing," five or six years ago, but that has been replaced with TikTok, Instagram and soon, influencers. The brand is experimenting with its first influencer partnership. he added.
Toppers of the Future
Looking to 2025 and beyond Toppers is considering how its store formats may evolve. Possibilities include carryout only locations and locations with drive-thrus, to meet consumer demand. “We're thinking about our buildouts all the time,” he said. “If delivery is still one of our needs, but not self-performance, how does that change the layout of our business? Can we reduce the square footage?”
Drive-thru is another possibility. “We spend a ton of time looking at other competitors in our market and not just pizza competitors. We know that Jimmy John's AUV's with drive-thru is about $200,000 more a year on average. Convenience is such a huge factor. People's convenience is so much that people don't want to get out of their cars.”