&pizza is a fun, walk-the-line pizza restaurant chain that had a 12-month plan to transform their business through data.
Enter COVID-19. What was slated for 12 months was accelerated and executed in a matter of days. That included a new menu, new SMS programs, and a new way of engaging their consumers using real-time data. They also allow customers to join their program simply and quickly by engaging the guest 'on their terms, in their favorite channel.
Darien Bates, Head of Technology at &pizza, explains how monthly registrations to their program doubled as a result of their new frictionless signup strategy, how better offer management processes drive increased revenue and why Cheetah Digital was the best partner for this transformation. Prepare to be inspired and start thinking about how to leverage the data you have available to create better consumer experiences that can provide a measurable lift in sales, even in the toughest of environments.
Tim: If I ask you, what's the best kind of pizza, what comes to mind? Go ahead and shout it out right now. Deep dish, thin crust, pepperoni, olives. Don't ever olive the pizza. Okay, who makes the best pizza? What pops into your head there? Yeah, your local mom and pop, and of course we all know the big chains, but I believe the best pizza experience is one that's completely 100% personalized to you. That is why I got on a plane and traveled to the undisputed birthplace of pizza, Washington, DC. Maybe that was fake news, but I'm here to meet Darien Bates, the head of technology for& pizza. I'm also going to order my own custom pizza pie using their mobile app. What's it going to be? Spicy tomato, basil, pickled Fresno chili, and bacon. Ordered.& pizza is a brand scattered up and down the Eastern Seaboard of the United States. I want to understand how Cheetah Digital is powering their personalization strategy and the data intelligence layers behind their loyalty program. They're moving data in real- time between platforms to deliver direct- to- consumer messages and offers personalized at a one-to-one level at scale. You can even interact with a real human using SMS. I think my pizza might be done. Oh, yes! My pizza! Thank you!
Speaker 2: No problem. You have a great day.
Tim: You too, have a great day! Ho, ho, ho. Well, I'm calling this the Tim pie, and I've got 10 minutes to eat this and get through our interview. Is this a joke? Oh boy. Oh boy, oh boy, oh boy. Where am I? What is this place? Darien! Oh guys, I am sorry I'm late. Hopefully, you didn't start without me. Man, how many flights of stairs did I have to come down here to get here? Why are we so far underground?
Darien Bates: Oh, we got a lot of data here. We've got to lock this down.
Tim: Oh, so this is your lab where the engine and everything is?
Darien Bates: Absolutely, this is where it happens.
Tim: All right. Well, I'll tell you what, give me two seconds, let me catch my breath, and then we'll start. How's that?
Darien Bates: Let's do it.
Tim: Well, Darien, thanks for having me. It's great to be here. I want to kick- off for people who may not know at home, what is& pizza? Can you give us the high- level overview?
Darien Bates: Sure,& pizza, in some ways we're the... I wouldn't say run of the mill, but sort of just the concept of a walk- the- line pizza place, sort of Chipotle for pizza. We started off as... you come in, walk the line, pick your ingredients, put it on a pizza, all done in three minutes. Fresh dough that we make ourselves, it's rolled out through the oven-
Tim: It was great.
Darien Bates: ...Done in three minutes.
Tim: It was great. I got to tell you, east coast... In Denver where I live, you cannot get real pizza dough. So it was great today to come back to east coast... something in the elevation or the saltwater, I don't know what it is.
Darien Bates: Absolutely. We're kind of an east coast brand. We go all the way up. We have a shop in Boston, all the way down to... we're about to open one in Richmond. So we kind of run that part of the Eastern Seaboard and then... east coast for now.
Tim: And Dulles Airport, right?
Darien Bates: Dulles Airport. We got a-
Tim: It's always packed. Every time I go through, man, there's a line so people know.
Darien Bates: Dulles Reagan Airport as well. So you can't come in and out of here without seeing us at some point.
Tim: Cool. Well, let's talk a little bit about your 2020. Let's dig right in because, in 2020, we talked to you a little earlier this year in a thinking caps podcast episode, where you explained your digital transformation roadmap for the year. You had a six to 12- month plan and you explained,"Okay, COVID hit. Boom. We have three days to actually do this year- long plan." But can you give us a high- level overview of what your digital transformation goals were for the year and beyond?
Darien Bates: Sure. And I think maybe a little context that's useful is to think we started as a walk- the- line brand, which is to say that the experience with& pizza started off as... you came into the shop, right? You came to the shop, you picked your ingredients, you saw them in front of you and you walked out with your pizza. And very much that kind of that inaudible... experience. And our idea was always like, that's the experience that people love, but that isn't the experience that necessarily is what people are now living to these days. Off premise as a growing trend. You need to have an off- prem friend... delivery. You look at the DoorDashes of the world. This is even pre- COVID. You look at all these off- premise delivery experiences and everybody's growing gangbusters. Everyone is expecting their food to come to them. And what we knew as a brand was, we were best as a walk- the- line brand at the time, we were best as an in- shop experience. And we needed to turn that into a digital experience that could sort of equal that level. At the time before COVID hit, we were running about 15% of our total sales, were coming through our native channel through our app basically.
Tim: So that'd be your mobile app where people can make a customized order, order it and come pick it up, or get it delivered.
Darien Bates: Exactly. It could be on a mobile app, or it could also be on the website, but between those two, they share a codebase. And then another 20- some percent was coming through DoorDash, Uber, was coming through the-
Tim: Third parties.
Darien Bates: ...Third parties. And then the rest was walk- the- lines. We had about 60% was walk- the- line orders. And then as you know, with COVID, everything shut down-
Tim: We all remember COVID-
Darien Bates: We all remember-
Tim: ...I don't know when you're watching this, but remember COVID?
Darien Bates: Yeah.
Tim: Of course.
Darien Bates: Oh god. From your mouth to God's ear on that. But what suddenly happened is we lost all walk- the- line, everything then went right through our digital channels. And we went from obviously about a 40% digital, 15% native, to 100% digital, right?
Tim: Yeah, everything.
Darien Bates: Over 50% going through our own channels, another 50% running through the providers. And what we had in that moment was like," Oh, this is now the experience of& pizza." This now represents the brand in every way.
Tim: So where you want it to be, which might've been 12 months away happened... in the podcast, you've talked about it happened in-
Darien Bates: Three days.
Tim: ...Three days. New menu-
Darien Bates: New menu.
Tim: ...Ill- timed because of COVID, but you had these great best- laid plans. And it wasn't that you've changed gears, as you said, you just accelerated this digital transformation, this digital acceleration.
Darien Bates: Right. Exactly. And we, yeah, in three days we went from a type of volume that we would have been hoping for over the course of six to 12 months to three days. And what that did for us, it prioritized certain types of things. It prioritized the scalability of the system, the ability for the system to handle a lot of things, and the ability for the system to deliver something close to what the experience was in the shop as quickly as possible. And we think we managed that pretty well. But what we still had to figure out, and what we've still been working on is actually, how do you get that digital experience to get closer to an on- par experience with the walk- the- line experience. Or even better, right, can you make the& pizza experience, which was traditionally shop- based actually an anywhere- based experience that would be just as good as that initial walk- the- line and getting the pizza fresh out of the oven? And that's been where our digital journey was prior to COVID and it's where it's been going since then. And on that was this whole idea of how do you know the customer better? How do you respond to what the customer's preference is and personalization requirements are, better? And that I think really drove our thinking ahead of time. And now I think in this current age that we're in, that's vital to survival, I think for any brand is to have that capability.
Tim: Personalization is a keyword, always kind of has been lately, but you guys truly live it. I mean, I experienced it today. I looked in the app, I've got over 50 menu items I can put on a pizza. I mean, I literally could make a one- of- a- kind pizza that probably hasn't been made in a month or even a year. So truly personalized, but that's core to your strategy, right? Let's talk a little bit about how you're stitching that together on the back end because you have some really interesting systems that are playing this, Cheetah Digital being one of them. Can you explain a little bit of the top line of how that data moves and how personalization from a high level is happening from offer management and taking the right behavior or the right information about John or Jane DOE and making a really realistic, personalized one- to- one offer?
Darien Bates: Absolutely. Well, you've hit it on the head. First of all, personalization, I think is just such a watchword for us in terms of like, we believe that people should be not just personalizing their pizzas but personalizing their lives. It was one of those things that's even an ethos in our company that we ask for our team members to express themselves, to be unique, to be personal, to not just be like, kind of cookie- cutter in who they are.
Tim: They don't have to put on 30 pieces of flair to show up?
Darien Bates: No, exactly. I believe the more tattoos and piercings the better in some places.
Tim: Oh, can I get a job?
Darien Bates: Yeah. So I think that for us so much is the you- be- you kind of mentality really kind of starts at the top in terms of if you've ever met Michael Lastoria, if ever seen Michael Lastoria, he is very much like," Look, just come with your true self and we're going to have a place for you." And then like, how do you work that down through the pizza itself? So the ability to kind of combine a lot of really interesting ingredients... it's not just the standard pepperoni. I mean, although we do have pepperoni, it's not just pepperoni, cheese, mushrooms. It's all really interesting ingredients that are really kind of unique and expressive. But then underneath that is this data that sits underneath and these systems that sit underneath it really kind of empower that data to work in ways that make personalization inevitable and kind of seamless. And so the systems underneath, I mean, we could go through the whole stack, but I think really the useful ones to talk about here are loyalty management, obviously with Cheetah. Sparkfly, which is our offer management which-
Tim: That's where you actually build- out these different offers. You kind of build- out what's possible, but then Cheetah Digital kind of match it together to say," Hey, Tim's ready for this offer, et cetera."
Darien Bates: Yep, exactly. So you take an offer and it's amazing what... like you think about the building blocks of offers. If you just take an offer... the logic around a single offer, right? Like people who order these kinds of pizzas to get... for those pizzas to be$3, right? I want$3 for these pizzas right now, if you use this offer, right? And when you think about, use this offer, there's a classic way of like, well enter this code or something that. And that's where we're like-
Tim: Wait, hold on a second-
Darien Bates: ...Forget internet code for a second. Let's just take that offer. And now let's throw that offer into a machine that allows us to deliver that in a totally different type of experience. And that's where Cheetah comes in. Where, when we look at that, at Cheetah, we're saying like, what is the logic that you construct around a customer that can take an offer as one input? Take in other types of personalization data that is coming in from And Dough Apps phonetic, our custom- built operating system that can funnel in additional types of data. We have an underlying data lake built by a company, Datanova, it's our fusion hub, which combines data and pipes that up into it. And suddenly when you have all this data coming in, that little offer that says," Here's the$3 pizza for this," becomes a$ 3 pizza to this person, or it becomes this offer versus this offer or this offer at this time, because of this experience at this time. And suddenly you have this full flow of personalization happening based upon all these little systems that are delivering kind of incremental information, and it's all kind of orchestrated.
Tim: Got it. So that was very technical. Let's come back up a level on something that I noticed with you and& pizza that I thought it was very refreshing. I don't need to download your app to interact with& pizza. The ubiquity of SMS on a mobile phone, anybody can do it. You don't have to remember to download the& pizza. You can. You can, like you said, you can go to the website, but talk to me how you're using SMS in this ubiquitous manner that's really frictionless.
Darien Bates: Well, I think even going one level up from that, I would say that we believe that technology and I think this is certainly my philosophy, it's where I really jelled with Michael Lastoria when I started working here was the idea that technology is a way to do things, not a thing to do, right?
Tim: Fair. Fair.
Darien Bates: We are not here to build technology and to give people some sort of a whizzbang technology experience. What we're here to do is to give them a great pizza experience. And if technology gets you there, it should be the lightest possible touch along the way. Now, as you know, in building technology, it takes a lot of effort to make that touch really light.
Tim: Yes it does.
Darien Bates: And so for us, it's like, how do you remove layers of unnecessary technology, right? And how do you make the technology that is there as value- add as possible? And SMS became that as an anchor point for us because everybody has SMS.
Tim: Everyone. Every mobile phone has the capability to do it without going through much effort.
Darien Bates: Right. It is the ideal technology for so many things at this point, because it is yeah, absolutely ubiquitous. It is short. It is asynchronous, which is really important when we talk about our own ability to use it internally. And it absolutely gives us the ability to remove so many layers of the technology experience with the least amount of mediation as possible. So using our text message short code, for example, the idea was that you can use our short code to sign up for loyalty.
Tim: Got it. So explain that because I tried that earlier today. You just simply text the hash code that you're promoting ubiquitously everywhere to your short code on SMS and boom I'm in the royalty rewards.
Darien Bates: You're in the loyalty programming.
Tim: No, like, I don't got to put my phone number in, and I don't have to tell you what my kid's name is. And I don't have to tell you what my favorite flavor of ice cream is to remember my password. It's that simple. I'm in.
Darien Bates: Yeah. And we run a promotion on this, which is you have 500 points in your wallet, and you have a$ 5 off coupon. So that happens and the offer's coming in from Sparkfly, the points is being managed within Cheetah-
Tim: Right into the person's wallet.
Darien Bates: Right into their-
Tim: And when we say," Wallet," you're using that as a placeholder for like," Okay, Tim, this phone number, just text it in." That's a new contact record. We're going to put 500 points in his wallet, his first pizza's only$ 5.
Darien Bates: Right. Exactly. And Tim can walk in never having downloaded our app. Never having gone to our website and can just give his number at point of sale and that's$ 5 off. They'll just be like," Oh yeah. Do you want to use your$5 off on your pizza?"
Tim: So, I can literally walk in order a pizza, customize a pizza that's probably never been built before, 50 different variations. And then I can say, when I go to pay," Oh yeah my phone number is X, Y, Z." And all of a sudden, the wallet's instant it's there. I didn't have to, again, pull out the app. I didn't have to scan a code. It's just right there. And they say," Time, five dollars."
Darien Bates: Yep. Exactly. They give it right off. Right? And that's an example of how we say like, look, don't put all these gates up to people. Now that doesn't mean that we're not investing in our app. And we don't see the app as a valuable thing. But the act then becomes a way for people to do more with you rather than the only way for people to do something with you. Right? And so for us, it's like, well then if you want to do more, you're earning points. If you want to convert your points and get new offers, if you want to do other things with it, you can deepen that relationship. But our experience has been, you want to make that relationship kind of come together on the terms of the guest, rather than saying, you have to meet us where we are.
Tim: Yeah. No, I love that. And I get it. I could see how this app is so cool, by the way, when you're building a pizza, all these menu items, I could see how somebody would say," Hey, I'll order lunch for everybody today." Right? They want the points. They want to get the rewards. But there was something that was really cool. I was able to actually text in. So you had this," Hey, just text us." It wasn't," Text us if you have a problem." Which I probably could. It wasn't," Text to get this thing." It was like," Hey, text us." So I did. I said," How's the pizza today?" And somebody wrote back with a gift. It was like,"Mwah." I was like, that's genius. This is a real person. This is not a bot. So talk to me a little bit about how you're using SMS in real- time. The same way I would text my wife or my buddy to say," Hey, what do you want to do this weekend?" You're doing it on a one- to- one scalable level with customers.
Darien Bates: Right? And I think what's really useful to think about that is that we have a single short code, which is 20003. And that short code is, if you're going to text to join loyalty, that's what you use. You get an offer in your wallet, and you actually want to start an order. So you go to our website, you start an order-
Tim: Through the app?
Darien Bates: ...Through the app. Start the order. You get texted back when your order started. You get texted back when your order is finished. You walk in, you pick up your order. And in case of delivery, you get texted when the delivery is on the way. And so that arrives, you check your pizza, you make sure it's right. If there's an issue, you just text right back to the same thing. And you say," Hey, there's an issue." That then gets resolved. Let's assume it gets resolved and you decide to immediately place a replacement order. Or actually, honestly, if you had an issue, they're going to replace the order for sure. But then you actually get your offer right back in your wallet, or you get the make- right back in your wallet. And you can kind of keep that process going where at every point, along the way, there is a communication. And then afterwards, after there's an issue, we can then follow up with a text-in, like," Hey, you good? You okay?" And that whole journey can be managed through where the guest is. Like again in their phone, on text being respectful of any kinds of requests for us not to text. But the text becomes the meeting them where they are in the journey where it becomes a value add to them, but the technology part of it doesn't ever become something that they have to do a lot of work to get to-
Tim: You're not forcing them through hurdles and over hills and whatnot. It's just," Hey, look, we're going to make this simple frictionless as possible."
Darien Bates: Right. I ordered something the other day and it arrived broken, right? And I was the journey that you have to go through to find resolution on that, it's like, oh, I have to go to their website. I have to go through, I have to look for-
Tim: You get an RMA number, some incident number. And now I got to manage this and remember it.
Darien Bates: Exactly. And the idea that I can text right back to where I've just been communicating. My order is on our side, on the internal side, that order is attached to that text message so that we can look up that order and just be like, okay, we're going to refund that in the moment and then provide either a refire or an offer as an apology right into that guest wallet inside Cheetah. It happens incredibly seamlessly. And we've gotten so many great comments back sometimes on social, sometimes on Yelp, sometimes in these places where it's like, we'll get people complaining about something on Yelp, and then we'll get them to send that edit. And it's like, they've-
Tim: They made this right.
Darien Bates: Right. Exactly.
Tim: With all this personalization and all this interaction, how do you measure success? Because success isn't always just measured in revenue, right? It can be measured, frankly, in high fives and smiles and animated gifs going between guests and your team. How do you build KPIs for measurement on it?
Darien Bates: Yeah, it's a good question because I think we do it at different levels, right? So in one way, we look at success or something like Cheetah, the instituting the loyalty program and we say, well, registrations are our success. People signing up for our loyalty program as a success. Right? And we saw within the first month of instituting Cheetah, we, I think almost doubled our previous high watermark in monthly registrations after we put Cheetah into place just by creating this more frictionless signup process, a better offer management into loyalty process. And so that's one way we measure success, right-
Tim: So doubled registrations, at least just by implementing this new strategy, this new engine and making it as seamless and easy as possible on guest-
Darien Bates: Exactly. And so that to us says, okay, well, that's working at that level, from a functionality perspective we're seeing that work. But it's not necessarily we're saying that people are transacting better. So we also have like, obviously the visibility into sales and the visibility into sales, particularly what we call attributable sales. Like, can you attack sales back to like, actually who's doing it, right? And are you getting greater visibility into your guest behavior and guest performance so that we can actually be able to manage that personalization process? And so for us, that's the second level of KPIs, which is like, are we getting greater visibility? And are we seeing greater frequency? Are we seeing guests coming back more? Right? And so we're seeing in those transactional terms, we're seeing those kinds of success metrics. Then I think there's the third success for us, which is this more kind of ephemeral... like, are we having positivity? Are we having good experiences? And this is where, when we have that kind of whole framework of that customer data, where we have text messaging. And one of the things about text messaging is it's one of the best unstructured data sources I've ever worked with, meaning that people naturally quasi self- categorize when they are in fact texting in because it's a short form. So they tell you quickly, like, what is this about and what the issue is. And you can do natural language processing on that, in these really interesting ways to be able to run sentiment analysis on it, to be able to categorize issues, to be able to pull out hot button issues, or to just identify really positive experiences. And I think that is the piece alongside kind of how we see engagement out in social media, how we see engagement out in like... actually text message conversations. There's a group of people and by a group of people, I mean, it is not a small number of people who just text to chat.
Tim: Yeah, sure.
Darien Bates: They just text till they say-
Tim: That's their communication channel.
Darien Bates: Yeah. Exactly. They're in a restaurant or they're... and they're just like," Hey, your pizza is great." Or like," Hey, I saw your thing..." Just text us as you were saying. And we just have conversations. And I think that kind of energy where people are like, I'm going to spend some time just chatting with& pizza. To us-
Tim: That's the holy grail, right? I mean, because you text your friends, you text your wife when you got a minute or I'm waiting for a flight," Hey babe, what's happening? What are you doing?" Like you're in the circle of people who are texting you as a brand and not going,"Hey I want to order a pizza." Or," My pizza stunk." Like if they're just texting you, you've made it. So obviously that's the high five KPI that isn't measurable from a CFO standpoint, but it's definitely measurable from a brand awareness and brand equity.
Darien Bates: Absolutely.
Tim: That's advocacy. I want to ask you why Cheetah... What was going through your head when you were vetting out solution partners for this awesome transformation, this awesome engine that you built, why did Cheetah make the cut?
Darien Bates: Yeah, I think Cheetah hit a really kind of a sweet spot for us, which I think was really important. I mean, it starts with data, just to be clear. For us, when you go through that whole set of loyalty providers that are out there and you start winnowing down like, oh, well what are my deal breakers here? It's like looking for a house or something. And you're like, well, these ones can't even do this. Right? It's like text to join. Right? Some that just can't do it. Right? Like there was no pathway to getting that there. And so that kind of tosses out that group. And then there's another set where it's like, okay, well we can get to that. But how easy is it to pull data out of the system? What's the data flow look like?
Tim: Sure. If you're working in silos, you're limited. You're always going to be handcuffed. And we hear that a lot. But...
Darien Bates: Right. And so the ability to kind of transfer data in and out of the system seamlessly. The ability to have-
Tim: To your data lake and your other partners as you mentioned Sparkfly, et cetera.
Darien Bates: Exactly. So that for us was like number two. And then the third thing is what does a company that is resourced well enough and is innovative kind of at its core enough and mature enough as a company that we can trust that we can run this at scale on it. And at the same time, it feels they're swimming with us.
Tim: So evolve and innovate basically into the future.
Darien Bates: Right. Because we don't even know the things that we need to build next to get to that experience. Yeah. We don't even know what we're going to need to build next. We don't even know necessarily what the new technologies are that people are going to be expecting. We assume actually texts will still probably be a part of it that seems-
Tim: Sure. That's not going anywhere fast.
Darien Bates: But the idea that we want to be able to have a system that is not just built for today, we want to have a system that actually is built for the next things we want to be trying. And when we went through kind of kicking the tires on all the partners, what we felt was the whole ethos of Cheetah was not just, well, this is what our platform does. It's like, well, this is what our platform will be able to do. This is where we're investing to be able to do it. And we saw that as something we wanted to invest in. Even in some of the negotiations around contract, which we won't talk about that here, but we looked at this and said, we're not even necessarily trying to find the cheapest option. We're trying to find the option where the people that we're working with, we are a part of resourcing and being resourced to get to the place where we want to be. And we heard that loud and clear and we've been feeling that throughout the process of moving forward with them.
Tim: Great. And that resonates to our mantra inside, which is 25% of our top- line revenue goes into research and development. That is a giant pile of cash. That's water falling back in so that we can innovate so that clients like you and partners like you can come to us and say," Here's where we need to go. There's a fork in the road, guys, let's make this happen." And that's what gets our team going. So it's good to hear that. I want to ask you one other follow- up to that though. How is it working with the Cheetah team, the team that you're actually assigned with and building these and ideating on?
Darien Bates: Absolutely. Well, shout out to David Tiano because he's been our solution architect throughout this. And he really got us to bright on this. I think the example I want to use here actually to sort of say," How's it going," is a week after we launched loyalty. So the new car smell is still on it. We launched our biggest promotion of the year, the biggest promotion of probably the last 12 months COVID or no COVID and it was all around this. It was using this new text- in functionality. It was using this new offer management structure. We had our biggest response that we had seen ever. And we had almost no technical issues throughout the day. So it was a one- day,$ 3 pie. Just text- in, you'll get the offer in your wallet and you can use it in- shop. You can order online." And it worked about as well as anything that's running in at that volume could, which was, again, not a best practice. I think our planning on this could have been better. So you can question our own wisdom, but the underlying technology just worked. And I think the attention to detail from the team, the willingness to go over and over... some ironing out these workflows and making sure that stuff would flow through exactly as it's supposed to. Yeah. I can't say enough about the work that they did.
Tim: Good. That's great. Well sink or swim moments, we know they all can go the wrong way. So I'm glad to hear yours did go the right way, but-
Darien Bates: Massive pressure testing on new technologies keeps me up at night.
Tim: Well, you guys are nimble. You're fun. You're innovative. And I would say that it's very evident that& pizza puts the customer at the core of everything that you do. I can see that from the app, from the texting, everything you've explained. So talk about a customer- centric, focused company& pizza foots the bill. We're glad that you guys are a client. We're excited that you are participating in signals. We appreciate that you had us here in Washington, DC, which may or may not be the birthplace of the pizza. Can you confirm?
Darien Bates: I am dubious about that we can tell them that one.
Tim: Well, there's fake news out there everywhere. I heard it from a friend from a friend. But no, this has been great. We appreciate it. We can't wait to see where your story goes. We can't see what you do to push us next and what we go to market with.
Darien Bates: Absolutely. Well, thanks for coming in, and yeah, we're happy to be on the program.
Tim: Cool. Well, I'm going to try and get some pizzas and put them in my luggage on the way home to Denver.
Darien Bates: I don't think anyone in the right mind would stop you.
Speaker 4: Signals 20. The contents...