How Toppers defends its turf

  [caption id="attachment_18318" align="alignright" width="236" caption="Toppers Pizza* Founder and President, Scott Gittrich"][/caption] Toppers Pizza founder and president Scott Gittrich built his brand on “talking smack,” the irreverent voice the 63-unit brand uses to market to its core Millennial customer, but he’s aware that his largest rivals also dish out some smack of their own when talking about where they get their market share growth. Officials for Papa John’s Pizza and Domino’s Pizza, for instance, make no secret of the fact that they have grown their share of the competitive pizza category by crowding out smaller chains and independent pizzerias. In doing so, they often tout their first-mover advantage in digital ordering, their scale for absorbing food cost inflation, and their ability to define $5 or $10 as the standard price points for the category’s value equation. Let them talk, Gittrich said. He knows that wherever Whitewater, Wis.-based Toppers opens a store, Pizza Hut, Domino’s, Papa John’s and Little Caesars are likely located around the corner, ready to rain down marketing throughout the trade area and generally “be the air we breathe.” But Toppers has achieved its own sales growth and market share gains the past few years by focusing on having the higher-quality product, fanatical customer service, and a digital-ordering platform that is growing as quickly as some of the bigger guys’, he said. Those “big four” brands show no signs of letting up, either. “There’s no question that the larger chains are gaining share at the expense of the regional and smaller chains,” Tony Thompson said during Papa John’s Pizza’s fourth-quarter earnings call earlier this year, before he left to become chief executive at Krispy Kreme Doughnuts. “That’s obviously due in part to share of voice, our digital leadership, pricing efficiencies, etc.” Domino’s Pizza chief executive Patrick Doyle agreed, saying during his brand’s first-quarter earnings call that the largest players were growing at the expense of mostly independent pizzerias. “To the extent to which you’re seeing some of these newer players growing a little bit,” Doyle said, “they are clearly not taking share from us today, and potentially they’re taking even more share from some of the other locals and indepedents.” But Gittrich countered that Toppers’ systemwide sales were up approximately 16 percent year-to-date in 2014, “and every single point of that is taken out of the big guys’ share.” “We mostly think of the Big Four as the vulnerable party in any new market, although we know mom-and-pops and other regionals are part of who give us business,” he said. “One of the big places where we live is the fact that we aren’t them. It’s nice to be the underdog, because we’ve only got one direction to go, and I’m flattered that they study strong regionals.” Toppers’ percentage of sales derived from digital orders is going up at about 10 percent per year, a similar clip for the acceleration at Domino’s, Gittrich said. Even though his brand’s current sales from online orders mixes in the high-20-percent range, compared with the mid-40s for Domino’s and at 50 percent for Papa John’s, digital is still a place where Toppers is increasingly eager to defend its market share, he said. Additionally, while he also puts Toppers’ signature House Pizzas or Topperstix up against anything coming from a competitor’s R&D kitchen, he said that Toppers ultimately grows sales because of its people and culture. Managers and delivery drivers are trained to serve guests at a level most customers wouldn’t expect from a much larger chain, he said. “Our positioning is a hard one to triangulate,” Gittrich said. “We’re small, and our people and our culture are huge pieces of how we’re driven. I don’t have to out-compete Patrick Doyle. In the end, we have a Toppers store across from Pizza Hut and down the street from a Little Caesars, and what happens inside those four walls matters. … It’s easier to win that fight when you’re small — talk to me when we have 8,000 stores — but we take it to the bank with our people.” Such customer-focused operations and marketing are how regional brands in any restaurant segment can defend their market share from their giant competitors, marketing expert Jonathan Rodgers said. “The best defense is always a great offense and doing great work to promote yourself,” said Rodgers, chief creative officer and founder of restaurant-focused marketing agency Craveology. “The secret of it is not to make people love you, it’s to make those people understand that you love them.”