More Than Punch Cards: Loyalty with Mike Bausch

SPEAKERS

Mike Bausch, Zack Oates

Mike Bausch (preview)

The concept of loyalty can be fortuitous and it can be death. If you train the customer that only when we ding you with a deep discount do you come in, you’re training them to be, for lack of a better term – I did not create this term – bottom feeder.

Zack Oates

(Intro) What’s up? Zack Oates here – author, entrepreneur and customer relationship guru. Welcome to Give an Ovation: growth strategies for restaurants and retailers, where we find industry leaders to share their secrets to grow your business. This podcast is sponsored by Ovation, the actionable guest feedback tool that works on or off premise, and is easy, real-time, and actually drives revenue. Learn more at Ovationup.com.

Welcome to another edition of Give an Ovation. I am joined today by Mike Bausch, who is the owner of the 17-year-old, Tulsa born, Andolini’s Pizzeria, which was voted one of the top 10 pizzerias in the United States by Tripadvisor. Can’t wait to go out there. Finally a reason to visit Tulsa. He is the Vice President of the World Pizza Champion team and a voice of inspiration from being the author of Unsliced: How To Stay Whole In The Pizza Industry, to being interviewed by numerous national television channels, as well as a great public speaker. Excited to meet him in person this year at the Pizza Expo. But Mike, thanks for joining us today on Give an Ovation.

So first of all, Mike, tell us a little bit about handling this pizzeria. Like, how did you become the top 10 Pizzeria in the US? That’s like, no small feat. I mean, I’m guessing there’s probably more than 12 out there.

Mike Bausch

There’s, there’s, a few. Yeah, that happened by purely the TripAdvisor algorithm, which I’m very thankful for, because it’s devoid of opinion. It’s not like oh, well, that’s because of this guy, or this writer has a thing for that guy, or whatever it is. And we did not know what was happening. We haven’t paid TripAdvisor. It was just the algorithm had a public press release come out one day, and it popped in my Google notifications. And I like pulled over “Well, what?”

So we started as a 1500-square-foot restaurant in Tulsa. I moved out here, right after college, instead of going to law school, after going in the Marines. And as an officer candidate, at OCS, I have type one juvenile diabetes, so that was not going to be my future. I was not allowed to return for medical reasons. And then I just took it all and invested in my 20s at making a restaurant. That at the start, didn’t super suck. But it wasn’t great. And we got better at it and better at it. And every time there was an opportunity that presented itself, we took it and always, I think how we got there – the easiest, most palatable answer is: I wanted it to be experience-first. It was never, well, can we afford that cheese? Or, I don’t know, would anyone tell the difference on that product. It was, let’s make the best mozzarella, fried mozzarella possible and not buy a frozen mozzarella stick. Yeah, okay, that’s the best? Now let’s train everyone how to do it. And now that’s good, move on to the next thing, and then make it. Everyone’s excited to work here because we’re doing cool stuff. And the environment’s inviting, and then if we lead with all that, the money should fall into place.

Zack Oates

Yeah, and, and I think that that is something that’s so important because oftentimes nowadays, a lot of restaurants get caught up in in loyalty programs, right? A loyalty program is a freaking great experience! That is your punch card. That is your you know, the best loyalty that you can have is a great product, great service, great experience. And you know, and something that they feel like they’re getting their money’s worth, you know.

Mike Bausch

It’s very hard – with the concept of loyalty can be fortuitous and it can be death. If you train the customer that only when we ding you with a deep discount do you come in that you you’re it’s you’re training them like they’re Dwight with the with the thing of the they get a mint now —

Zack Oates

You are good at pop culture! Before the podcast Mike was telling me, he’s like, “I doubt there’s a pop culture reference that I’m not going to get.” Here he is, throwing in an a random Office episode. You’re talking to the right guy if you’re talking Office, Mike.

Mike Bausch

I don’t go like Dennis Miller level deep. Ever seen Dennis Miller live? “This guy’s more crazy than Ho Chi Min on an average Sunday!” And it’s like, well, what? Like I’d like break out an encyclopedia – before the internet – to understand. I really did in the 90s like to understand what Dennis Miller’s jokes were before the internet going to the Wikipedia.

Zack Oates

Oh are you kidding me? 50% of my high school history came from Billy Joel, “We didn’t start the fire”. I memorized the lyrics. So then I was like, what is “Chubby Checker?”

Mike Bausch

“Doris Day, Red China, Johnnie Ray, South Pacific” —

Zack Oates

By the way, if anyone cares, we’re having a podcast here talking about food.

Mike Bausch

And we just, we just lost, like 98% of the people except for two nerds in their own nerdy and like, “I know that reference exactly!”

Zack Oates

It’s like a bad Family Guy episode. Okay. So okay, we’re talking about Dwight. Loyalty. Here we go. We’re back on track!

Mike Bausch

Loyalty. If you are telling someone, “Hey, come in for the steep discount,” problematic. You’re training them to be, for lack of a better term, I did not create this term, bottom feeders, you’re training them to that. If you’re like, Hey, we are so great. Because you’re in a loyalty program, you get to know about updated stuff, and “Hey, loyalty program people, this weekend, when you buy all this stuff, we’re also going to give you this new item that we’ve been working on”, then it’s like, oh, “I’m in the club.” That’s what you want them to feel like.

Zack Oates

Yes, I love that. Right? Loyalty is about being in the in-group, it’s not about getting your 10th thing free. Because let me tell you, I go to a place the 11th time, it is not because I get some free dinner. I mean, you won my business in the first 10 times. The first nine times, like, come on.

Like, for example, I was talking with a restaurant owner, and he was saying, you know,

“We have an 80% use rate on our loyalty program like 80%. For tickets, they are using our loyalty program.” It’s okay – what do you, what do you do with that? He said, what do you mean? I was like, “Well, I’m a customer of yours. I’ve never gotten a text message from you. I’ve never gotten any information from you. Do you, Can you use the data?” He’s like, “Well, no, we’re not allowed to because we don’t collect permission.” I’m like, “Well, then what’s the point of collecting the data? Because when I go to you to get something for what I get when I go to order, every every few weeks, they just say hey, do you want to apply your $5 discount? And I’m like, sure, I didn’t even know I was getting it. So you’re just giving me money to go there. I’m fine.” Spending it anyway.

So I think you’re totally right. It’s about the experience. And that loyalty is about making them feel in ,as opposed to just giving them discounts. Love that. So as you’ve been through a lot these last 17 years, right? And what advice, let’s take you, your restaurant, two years in, okay. Let’s say you started in 2017. You got through, 18? Through 19. You hit 20, rough patch in here, we’ll come out of it, but you’re still alive. What advice would you give you, four years into your, into your restaurant?

Mike Bausch

Well, if someone’s four years deep right now some things are at least a given. They at least know how to operate. They they’ve gotten over the operational, it’s almost like, “I’m about to open and I have $150,000.” Like you’re gonna need more than that! A lot of people think, oh, I, I bought the oven, I have the chairs. I’m done. And it’s it’s never that. And then having financial, not just discipline, but organization, especially at the four years spot, that these are the not sexy parts. But like you, the people who got PPP funding, weren’t going into their aunt’s attic to find their 2017 taxes. They were ready to file the SBA, they had their, their, their financial self organized in a way that was palatable and easy to delineate to someone else. That’s going to be important in the future. If it’s 2020, and you’re like, what am I doing? What’s the next thing? I think it’s really investing in your systems, if you want to go into another store, what reason does someone have to work for you? Other than this is a pizza place. I think that’s the biggest X factor as the labor market is super, super hard. People are like, oh, no one can get a job! Anyone can get a job right now at a restaurant! Anyone! And they’re begging for people. But a lot of people have so many other sources of income than that’s ever existed.

Zack Oates

Including the government, right? I mean, quite frankly, I mean, all of all of your frontline workers just got some, you know, they got some, what, three, four rounds of stimulus and if they have kids, they’re about to get some more money. And so yeah, it’s gonna be harder to get those frontline workers.

Mike Bausch

Here’s an interesting problem in Oklahoma right now: dispensaries are paying a lot of money, but because they’re not federally funded, they’re having to pay under the table. So there’s guys who are able to like stay on an on unemployment and get buku level cash in dispensaries. It’s just the Wild West with dispensaries in general.

Zack Oates

And quite frankly, you know dispensaries are a, you know big – while they do support the munchies – right? It’s it’s a big labor suck because they’re making per location 10x what a restaurant would be making, right? So they can afford to pay a lot more because their revenues are just crazy.

Mike Bausch

I think really treating people exceptionally well, making your process to get on boarded and trained up not only seamless, but enjoyable. These are things that are gonna matter a lot. And if the labor market ever decides that it’s $15 an hour for someone to work, the people are getting paid less than that, because it’s the whole basis of our social contract is that tips take it over to a place where it’s palatable for this line of work. Right? Take that out of the mix it the whole thing just kind of falls in on itself. And people are going to ditch servers and go to just kitchen staff and one counter workers. So I think people need to think big picture right now. Focus in on staff, obviously product, but I’ve always said product is the price of admission. Like you can have a great pizza, that’s just like, Okay, great. Here’s your ticket. Now it’s branding, ambiance, and the service levels.

Zack Oates

Because quite frankly, data shows people will choose and will pay more for eight out of ten food that’s a 10 out of 10 experience. Right? Because quite frankly that experience, it makes the food better. You put bad food in good packaging. I mean, Gordon Ramsay right? He did this prank where he served up other people’s food and said it was his and people were, their minds were blown and it was like a sous chef, but because they said it was Gordon Ramsay, it tasted like Gordon Ramsay, right? And so not saying he’s the —

Mike Bausch

The food has to be impeccable. But yeah, if you look at Saks Fifth Avenue versus Marshalls, they could be they could both be selling a polo shirt. And one on a mannequin in the window and it says $450 for this Polo, but the other one’s on Marshall’s rack, it’s a 450 and it’s like, hell no! But the most that they could ever get is like 60 you’re not even like we’re talking 30. And that’s the two different customers that goes into the loyalty concept, the Marshall’s customers going for, ‘I don’t care about fashion, per se, I have a budget, this is what I care about.’ The other person’s ‘I want to experience feeling a million bucks and pay a fraction of a million bucks to feel like a million bucks to get to that point.’ And with food, experience could get that person to feel what has never been normal. If you look at the 70s, there was no rest – restaurants just weren’t everywhere. There weren’t that many restaurants in the 70s and 80s. Kinda with the greed is good level era, there started to be more restaurants, but no one went out to eat. Like each town had their one, maybe halfway decent Italian restaurant, maybe two pizza places. And now there’s so much more competition. People want to go to the best.

Zack Oates

I mean, and in the 70s they were still kind of like getting used to the microwave, right? It was like this, this thing. I stayed at a really old hotel that had a microwave from the 70s. And literally one of the settings was like chicken breast and like you would cook chicken breasts in your microwave. Like, you know that, that was what it was is all about the home cooking and and now it’s about the experience. It’s about getting out and which is what 2020 you know, obviously changed the face of so much. I think that’s one of the pieces of culture that got put on pause, and people are hungry for it. And one thing that we’re seeing though, is that attitudes and habits have changed as people have been going back into dining rooms, digital orders are not decreasing. Right. There are more people that are ordering net. And I think that that’s an exciting thing for restaurants and looking down the pipe. I mean, like you were gonna – get ready! There’s that influx of revenge spending where people are going to be going out to eat a ton or they’re going to be ordering out still. And I think that’s an exciting, exciting time to be in the restaurant space.

Mike Bausch

The stimulus I mean, any restaurant in America, I would challenge any restaurant to not say in who mid March, early March was not maybe the greatest week of their restaurant, every restaurant owner I know. And I was like, it’s not, is it the vaccine? Is it spring break? No, stimulus money. Just insane level spending at restaurants. And this last month with the stimulus money, and it shows, that shows the hope and predicate that they would go and invest back into the economy.

Zack Oates

Oh, yeah. Imean, I bought a metal detector. Right.

Mike Bausch

So well, well worn purchase. The generational thing is also interesting, because the 50s were still depression era parents. And it was very pretentious to eat out. It was it was lazy. When pizza was delivered to the house, a lot of you were like, you can’t even go to pick up up the pizza, and then it shifted in the 90s. And now it’s like, I’m trying to live my best life. And I know that that’s time wasted. But I can be with my family, which would just be like, people were just just having kids left to right. Like, yeah, I named them. They’re fine. And now it’s like, I live I mean, compared to 70s and 80s, to how many photos kids had of their whole childhood. Oh, yeah. When a parent takes about a week now.

Zack Oates

Right? Well, cuz you, first of all, who wants to go to CVS and get it get that all developed? So it’s really interesting. You know, there’s a lot coming down the pipeline. And man, I feel like, we’re just barely taking a sip from this ocean of experience that you have. And I know, I know, we’re approaching time here. But I would say, What do you feel like is is changing about the guest experience with restaurants? And how do we still maintain that as people are starting to dive back in as digital is becoming better? What are some critical things to think about with the guest experience in present day?

Mike Bausch

I think the first and foremost is experience that being aware of, Hey, I made the pizza, what else do you want? Like, no, they want more, you have to have some shine, like have a pizza box with in the pizza world, just on a simple level, that it’s a logo and I feel invited by it. But bartenders – people are going out bars. They don’t want beer and shots. They want to have cocktails and unique things. It’s like listen, I could have died. I didn’t. Give me something to live for. Now that I’m going back out to the world. And yeah, there’s a lot of the not even the political divide, but the mental divided Hey, am I safe? Am I not safe going out? Is going to exist in perpetuity. To that extent, I do think that there’s going to be restaurants that have COVID friendly sections, or like social distance sections of the restaurant, especially in it’s gonna be I bet you don’t see it in New York because they can’t afford the space. But I bet you do see in LA, that you’ll see like patios dedicated to social distancing two years from now.

Zack Oates

Yeah, I’m really curious to see what happens with all the all the outdoor structures in New York. Is it like talk about the wild wild East? I mean, they just kind of like, hey, build stuff, because no one’s on the streets. And now people are coming back and restaurants are like, well, we’re gonna keep this up, actually.

Mike Bausch

Yeah, New York got their ass handed to them. And they’re like, Well, what do you want me to do? I you figure it out. And they act like, okay, we did. Like, you can’t do this. Well, I just built this thing! Eh, well you cant. They had to deal with so much crap. And the landlords were total jerks to all the guys I know. In New York, like, hey, you’re not gonna have anyone else who’s gonna take this property, Can we just be cool to each other for six months? No, pay me. Yeah, you know, it’s like a ghost town.

Zack Oates

Mike I gotta have you back on here man. I want to talk ghost kitchens with you. I want to talk Family Guy more with ya.

Mike Bausch

I say to anyone who’s listening, you know, if you have a question about what are you doing, right, really decide what you are doing right, and go more towards it. And the things that you aren’t sure on, really stop and think about and look at people that are doing something like you and try and mimic it. And also reach out because the world’s become – even though it’s separate -It’s become closer, especially the restaurant community, more people are inclined to help each other out. So reach out to people. You love a restaurant in Chicago, say, hey, how did you do this? I would say, without even knowing who’s there, I bet you 50% chance you get a good response from whoever it is. Dm on Instagram, too. It’s so beautiful. You dm on Instagram, and people are responding.

Zack Oates

Yeah, I mean, that’s hey, that’s how you got on this podcast. Right? I just hounded you for a few months now. I’m just kidding. Yeah, actually, Mike, I really appreciate your response time with that. Well, here’s, here are my key takeaways from today.

Number one: loyalty can be fortuitous, or it can be death. Making a VIP club not a discount club.

Two: have the discipline of organization. Invest in your systems, invest in your processes. Don’t just play a restaurant, like be a real restaurant.

Number three: What reasons do people have to work for you? Make sure that you can define that and then live by that.

Number four: Customers want more than food and drink. They want more than bread and ale. They want something to live for.

And number five: do more of the right things. I think that is something that’s really critical is, it’s not just about doing doing the good things. It’s about doing more of that. So anyway, Mike, really appreciate you coming out. How do people find you/follow you?

Mike Bausch

I’m on Instagram @MikeyBausch, or for all things Unsliced, unsliced.com. And if you want to see what my restaurant is like, you can go to all things Andolini’s @andopizza on Facebook, Instagram, Twitter, all that.

Zack Oates

Awesome. Well, Mike for truly being that voice of inspiration, for helping us out in this restaurant community, and for giving me a couple of good laughs today, today’s Ovation goes to you. Thank you so much for joining us on Give an Ovation.

(Outro) Glad you were with us today. And thank you! Thank you to the risk takers, the troublemakers, the crazies who are keeping this world clothed and fed. You’re the ones who deserve an Ovation. Again, this podcast was sponsored by Ovation! To see how we can help you grow your business, go to Ovationup.com. Don’t forget to subscribe, and as always, remember to give someone in your life an Ovation today!