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Papa Gino's Drives Sales with Business Analytics
By Abigail A. Lorden, Editor-in-Chief
The traditional approach to business intelligence is focused heavily on financial metrics. It's about sales and labor, and how many ways you can dissect them. Dig deeper, however, and you run the risk of data overload, where too much information makes it difficult to find meaningful metrics.
"Too much data is better than not enough data, but sometimes you get lost in the details," explains Paul Valle, CIO of Boston-based restaurant company Papa Gino’s, Inc. (www.papaginos.com). "In worst case scenarios, there’s so much to look at that you don’t pick out the pieces that you really need."
Papa Gino's is a growing company in a crowded market: with 280 locations in the New England area, they operate both the Papa Gino's pizzeria chain and a grilled sandwich shop chain called D'Angelo. Executive leadership knew that continuing success would require significantly greater insight into business metrics. Managers could spend considerable portions of their time gathering data, and not enough time acting on the information.
Since joining the company in late 2006, Valle has been able to take Papa Gino’s business intelligence in a healthy direction, with a framework that now collects hefty amounts of information from across the enterprise and then boils it down into meaningful, customized reports. The result gives Papa Gino's the ability to manage by exception. "We try to create better visibility around what we’re selling and what our guests like," Valle explains, through an approach that integrates BI and customer relationship management efforts, and brings in data from finance, marketing and operations. The diversity of information collected — everything from phone call metrics to email rewards programs — is boosting average order amounts and improving operations.
It was early 2007, just a few months after Valle came to the company, when management embarked on an IT strategy that would guide Papa Gino's for the next five years. They interviewed users at all levels and departments to evaluate data and reporting needs, and identify the pain points in accessing that data. Valle and his team performed a current-state analysis and identified three major systems in use at the company: an ERP system, a POS system, and Excel. “Excel was in such massive use throughout the whole company that we actually labeled it as a system,” recalls Valle. “That’s typically where it all starts. You get to a point where, even though it’s a phenomenal product, there’s a point at which you need more. People here were doing amazing things with Excel that I’d never seen done, and the complexities and data sources they were tying together — it was truly amazing. It became a really natural selection to want move toward BI.”
Papa Gino's brought in Scarsdale, New York- based IBM partner QueBit (www.quebit.com) to implement a Cognos (www.IBM.com/cognos) business intelligence system (now owned by IBM) and build out Papa Gino's first BI application, a dashboard with insight into what happened the day before. Since then, the framework has evolved to include integration into Papa Gino's proprietary point of sale system, its Onosys (www.onosys.com) online ordering tool, Paytronix's (www.paytronix.com) loyalty solution, and Conversen’s (www.conversen.com) email marketing tool. They've also since implemented Teradata (www.teradata) as an encompassing data warehouse inclusive of Cognos.
"Initially, the whole project started as BI but we have brought in so many areas," says Valle. "We can track buying patterns, loyalty rewards purchases made online, in-store and on the phone, and we're doing stats with email marketing" to get insight into how many guests looked at a particular order, compared to the number that took advantage of it, for example.
The end result is an integration framework at Papa Gino's that's far from off-the-shelf; there's both a hub (Papa Gino's) and a web (between the vendors). Papa Gino's sits at the center with one-on-one communication with all of its providers. Meanwhile, many of the vendors have also created APIs for direct integration between their systems. A hefty amount of custom development had to be done, but the vendors were fully supportive of the project, recalls Valle. "It's good for them, not just for us; a system that talks with other vendors is a more complete system."
The choice to go with multiple vendors was a clear one, in that it allowed Papa Gino's to select best-of-breed solutions. "We wanted the best online ordering, best loyalty, best email marketing…the thought of having to integrate between them all, even though it was an important piece, wasn't really a consideration in whether or not to do it. It was the right thing to do for
It's All in the Data
The company now captures metrics from across the enterprise and is able to provide customized reports based on business need. Mangers get a daily score card that tracks sales, guest survey information, and labor and loss prevention metrics. District managers get additional comparative data that allows them to see areas for improvement throughout their districts. Regional VPs are given trending and historical information. "As you move higher up it’s a more holistic view," says Valle. To avoid data overload, reports are paired down to their functional needs. "Let's not do a report with 800 columns. If they want coupon use and success, it's a report on that. We take it down to only the items that need to be addressed," he explains.
On the operational side, the company captures phone metrics such as how long it takes to answer the phone, how often there is a busy signal, and how often a customer abandons a call. They track delivery metrics too, such as promise-to-delivery time and how long after a call the order is dispatched.
This sort of insight has lead to several "ah-ha!" moments, and both had significant impact on guest satisfaction. Through measuring delivery metrics, Papa Gino’s found that they were not only hitting promised delivery times, they were beating them significantly. "We said, don't tell them it'll be 40 minutes, tell them 30 minutes because we're hitting that. We were missing the time on the right side, and we took advantage of that to let guests know we're even better."
On the flip side, analytics revealed that the company was under-performing in telephone response times. In pizza delivery, there's an industry standard to answer the phone within 12 seconds. "It turned out we were doing worse than we'd expected so we put some focus on the phones." With some operational concentration, stores were able to quickly and easily address the issue. "They just needed to know they needed to work on it," notes Valle.
From a marketing perspective, the framework has helped Papa Gino's more effectively tailor its online ordering campaigns to drive both an increase in the value of the average order and the frequency of orders. For example, with online ordering, the company found there was a significant increase in the amount of food ordered per ticket but no increase in frequency. With the loyalty rewards, there was little increase in per-order value but the frequency jumped significantly. Now, Papa Gino's has been able to better tailor its marketing campaign to increase both the average ticket price and ordering frequency. The customer rewards program has helped increase the average ticket generated through online ordering by 50 percent.
Technology projects of this scope come with challenges. It can be difficult, for example, to secure financial support or get the necessary buy-in from key decision makers. The opposite was the case for Papa Gino's. User desire for a BI system was so strong, it was important to manage expectations and set a focused scope for what could and couldn't be done. "Because everyone was so on board with this, we had to maintain a focused scope. As soon as people started to see what it could do, that became a challenge. We also needed to allow for some creep, because people were excited about the project." Setting expectations was key to success. Also important was maintaining a balance between long-term goals, and achieving quick wins. "We couldn't tell people it would take a year," explains Valle, "so balancing between quick wins and thoughtful design was a challenge."
Despite challenges in maintaining scope, Valle says it's still important to involve the entire company. The trick, however, is to start with the executive team and allow them to set the priority from the top. That way, it becomes a company initiative, not an IT initiative. "I also say, when you're building it, keep an eye on the future. Where systems tend to fail is when you build like a house with ad-ons; instead, think about the design of other pieces while you’re creating initial design."
The absolute best thing a company can do for a successful business intelligence implementation? "Hire a consultant," says Valle. "Your team already has a full time job so you need to hire talented consulting help."
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