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Case Study: Punch Pizza Fires up their Social Media

By Edwina Reckel

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Purpose of Case Study:

Punch sold pizza for 84 cents after Randy Moss was traded to the Minnesota Vikings, gave away

free pizza to people who trekked through the blizzard for the “Snowmaggedon special,” and

sold half price pizzas on the weekends to “cure a rough night out” at their University of

Minnesota campus location. These are not your average restaurant specials. Since 2007, Punch

Pizza has made a name for its authentic fire roasted pizza by “firing up” their social media. The

restaurant does all of its marketing and coupons online on their Facebook, Twitters, and blog.

Their giveaways have brought such large crowds that even news stations have covered it.

However, originally the Minnesota based restaurant did not have a very social media friendly

policy and customers noticed. A prominent Minnesota pizza blogger, Aaron Landry wrote in

2007, “One of the cooks immediately told me “no photos of the oven.” I asked him if he was

serious. Twice. He told me that they don’t allow photos of their oven because they don’t want

people stealing their design. I hate to break it to you Punch Pizza, but you’re not that special.”

(Landry). Punch responded by overturning that policy and beginning their social media

campaign. The purpose of this case study is to analyze how successful Punch’s social media

campaign was in increasing brand awareness, creating favorable opinions about the brand, and

perhaps even a positive impact on sales.

Thesis STATEMENT:

Punch’s choice to integrate social media with their marketing was the best option with their

limited budget, small size, and the target audience’s medium of choice. Punch’s two way

communication not only allowed Punch to promote their coupons but also helped them better

monitor positive and negative word of mouth. In today’s social media culture, word of mouth

travels even faster and Punch’s decision to actively engage with social media puts them ahead

of competitors and allows them to react to customers’ issues very quickly.

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History

John Sarrono grew up in Milan, Italy and when he moved to the states he missed the

atmosphere, culture, and most importantly the great pizza that the restaurants had back in

Italy. He decided to open up his own authentic Neapolitan style restaurant in Highland Park in

1996 (Sarrono). The interior is built to feel like an old pizzeria with recycled wooden booths,

exposed kitchens where you can see your pizza being prepared and then fired in the wood

burning and hand tiled oven (Kaliebe). The restaurant’s walls are decorated with Pulcinella

masks, which is where the restaurant takes its name. Pulcinella is a masked character that has a

strong presence in Naples and is known for his trickery (“Love-Neapolitan Style”). John Pucket

and his wife, the founders of Caribou, enjoyed eating at Punch and loved the concept of

authentic and quality Italian style pizza in Minnesota. In 2001 Pucket and Sarrano became

business partners and in 2002 they opened up a second restaurant. The new co owners made a

conscious effort to expand slowly, unlike Pucket’s other project. Pucket said, “With *Punch+ we

are growing more organically with cash flow and not taking equity investors. So we just wanted

to try something different, where we could put all of our energy and focus on operations versus

growth.” The slow expansion ensured each location had, “good sites, good managers out front,

and talent to work the oven” (Kaliebe). Wayzata opened in 2007 and the most recent Stadium

Village location opened in 2010. In 2007, Punch signed on as a client with the strategic

communications company, Tunheim Partners. Since then they have increased their efforts with

public affairs to increase awareness about the restaurant and raise positive perception about

the brand.

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Scope:

The Minnesota based restaurant currently has seven stores; Calhoun Village, Eden Prairie,

Highland Park, Wayzata, Northeast Minneapolis, Grand Avenue, and the newest in Stadium

Village.

1. Punch is not part of the Large Pizza Market

One obstacle that Punch must face is entering a competitive and oversaturated pizza market.

Pizza Marketing Quarterly estimated that around 74,2999 large pizzerias in the U.S. and large

chains such as, Pizza Hut, Domino’s, Papa John’s and Little Caesar’s make up 35% of annual

pizza sales while independents account for more than 50%. Regional pizza restaurants such as

Donato’s Pizza, CiCi’s pizza, and Round Table Pizza make up the remaining 15%” (Kaliebe).

2. Member of Associazone Verace Pizza Napoletana

In order for Punch to stand out they must provide something unique and something the

majority of their competitors cannot. The restaurant is one of only 20 U.S. members of the

Associazione VeracePizza Napoletana, an international trade association that seeks to “promote

the culinary tradition of the Neapolitan pizza” ("Our Members in Italy and the Whole World”).

Punch uses authentic Napoleon ingredients and wood burning ovens to create a unique

experience rather than expanding store locations, which could have a negative effect on the

authenticity and ability to provide a unique experience.

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Punch is purposely maintaining their smaller scope. The slower growth is not a weakness but

instead insures controlled and quality locations. This strategic move to maintain a small scope

could lead to smaller profits for the company, however; Punch uses their small scope to their

advantage by maintaining their personal feel, authentic ingredients and cooking process, and

quality employees and locations.

3. Scope of social media

- http://www.ilovepunchpizza.com/

This site acts as a platform that consolidates all of their social media on one site. It is also an

easy name for customers to remember and utilizes search engine optimization.

-Each location has their own twitter and Facebook account

-The overarching brand has its own Facbook and twitter account.

-“Punch Neapolitan Pizza” had 14,625 likes on Facebook and @PunchPizza has 9,813 followers

on Twitter as of April 13th, 2011.

Budget:

Punch is a privately owned company so their budgeting info was not available. The annual sales

per unit is between $1.5 million and 2.million. The Star tribune reported that in 2009, the

company, “should hit $10 million in revenue this year and has had positive revenue

comparisons each year, though same-store sales so far in 2009 are flat” (McKinney). Another

article that helped me get an idea on the marketing and communications budget was from City

Pages. In the article Pucket states, “social media has enabled us to have a closer one-on-one

relationship with our customers and save money on mailing and traditional advertising, which

we then use to give away food to our customers” (Barrett). The numbers of how much it costs

to be a client of Tunheim was unavailable and monthly prices that strategic communication

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agencies charge vary widely. However, as Pucket points out, social media costs are low, so

Punch is able to have pizza giveaways and large donations to charities.

SWOT

Strengths

-An untapped market-Neapolitan style pizza is not offered at many other places in MN

-Good deals (discounted and free pizza)

-Customers are involved in the decision making process

-Rule of participation-customers that have a say are more likely to be interested and motivated to participate

-Open system-customers in the know of what is happening

-Using rule of rewards-customers motivated to get deals

Weaknesses

-More expensive

-Some promotions create very long lines and wait times for customers

-Depends a lot on triggering evens and topicality-For example, a promotion for the “Snowmagadeon” coupons for free pizza were issued without much planning ahead and hundreds of people came out in the snow storm. This could be a weakness if there isn’t much going on in the area or there topics could not appeal to the market and they would have a low turnout.

Opportunities

-Involvement in fundraisers and community relations.

-Become sponsors for more sports/organizations to appeal to their target market ( i.e. they are currently the official pizza for U of M’s Women’s Basketball and Soccer teams. They have billboards at events and offer tickets and pizza combo deals)

Threats

-Americans not used to Neapolitan style pizza won’t like it

-Many competitors who cater towards the same market (fresh, quick service, urban)

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Motivational objectives

1. To engage with customers using social media.

2. To create positive customer interaction and control negative word of mouth.

3. To promote coupons and giveaways to get large turnouts and increased foot traffic.

Informational Objectives

1. To expose Minnesotans to authentic Neapolitan Pizza

2. To inform customers about the fresh quality ingredients Punch has.

3. To provide quick service with wood burning ovens cook pizzas in 90 seconds.

Target Audience:

Because Punch is a local company all target audiences share the geographic factor of being

from Minnesota. The target audiences can be segmented into different categories which follow;

1. Millennials

a. Demographics:

Older high school and college kids, aged 17-25.

b. Psychographics:

Value quick service, many go to Punch in between classes

Limited budget so need lower cost food

With the organic and local “Green Movement”, they are looking for food

like that has healthier/organic ingredients.

Tech savvy

Interested in deals and giveaways

High majority use social media to receive their information

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New 2010 location in Stadium Village is in the middle of the U of M

campus

2. Families

a. Demographics:

Married couples with or without kids, aged 30-45

Majority live in suburbs around Minneapolis

b. Psychographics:

Seeking healthier alternatives for themselves and their kids.

Need quick service

Seeks out coupons and deals

Enjoy going out to eat as a family but want cheaper alternatives than

traditional restaurants.

3. Women

a. Demographics:

Females

Aged 25 and up

b. Psychographics:

Concerned about calories and health

Would like Punch’s healthier pizza alternative

4. Urban

a. Demographics:

Aged 25-45, single

b. Psychographics:

Like to try chic, new, and trendy restaurants

Need quick service in between work.

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Key Messages

-Punch is a “passion brand”

-Consumers are an essential part of the decision making process

-Money that would have gone into more expensive traditional marketing is instead being given

back to the community through free pizza and charity donations

-The experience from the restaurant is personal

-The product and atmosphere is authentic

-Punch is a youthful and relevant brand. They know what is happening in the news and what is

coming up with trends in social media.

-Punch cares about the community

-Punch has good deals

-Quick service

Strategic approach

After Punch realized that one of the proprietary wants from their target audience was the

utilization of media, they created strategies that met this need and went beyond. Their

strategic approach was to use social media to its full potential. Social media is in real time and

people post things that interest them so Punch’s strategy was to base their promotions off of

these popular topics. This integrates their name with something that people were already

interested in and instead of Punch having to compete for attention against sports, weather, or

national news, they essential “ride the coattails” and become part of it.

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Additionally, Punch not only utilizes social media, they engage and delight their consumers.

Free pizza makes everyone happy; new potential customers are drawn to try Punch and loyal

customers are rewarded.

Engaging with customers and promoting deals based on topicality has helped Punch establish

an active two-way communication where customers are coming back for more. Punch’s

strategic approach is to build positive feelings the brand, respond to negative word of mouth,

and increase use of coupons all through social media.

Strategies and tactics

1. Use topicality in promotions to stay relevant and newsworthy.

a. Purpose: By tying into something that is already talked about and getting buzz in

traditional news media, Punch makes its deals and product newsworthy.

b. Tactic: Follow news stories that the target audience is talking about. For

example, when the big snow storm hit Minneapolis in February of 2009, news

stories were covering it and people were updating their social media. A trending

topic on twitter was “#snowmaggedon. They tweeted with that hash tag, so

anyone that was looking at the top trends would see their promotion. Instead of

having to pay for ads on TV, Punch is earning it. Promotions based on topicality

and draw big crowds interest local news stations, which gave Punch free

publicity (Sarigianopoulos). They also gained profits on a night, such as a big

snowstorm, that they would have otherwise not due to labor, food costs, slow

business (Grundstrom).

2. Make partnerships with other well-known Minneapolis businesses to maintain “passion

brand” and keep a personal feel.

a. Purpose: Team leaders on Punch at Tunheim described Punch as a “passion

brand” (Erickson and Wires). People who go to Punch feel tied to the brand and

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like the authentic and personal feeling. By teaming up with other “passion

brands” such as Izzy’s Ice Cream and Surly’s Punch is advancing its personal

Minnesota feel.

b. Tactics: Reach out with Minnesota only brands that share similar scope, history,

and marketing styles of Punch

3. Use specific coupons for different target markets to utilize the rule or rewards.

a. Purpose: This helps Punch make customers feel important and essential to the

businesses. Psychology has suggested that people will be motivated to do

something if they get something in return.

b. Tactics: Punch has recognized local businesses and organizations and creates

deals specifically for them. For example, they had coupons for General Mills,

Roseville high school students, and U of M faculty. By singling out one group, it

makes them feel special and more likely to use the coupon and go to Punch.

4. Maintain uniqueness and separation from competitors by having the complete package.

a. Purpose: Because Punch cannot compete on the size, scope, or budget of the

large pizza companies that hold the majority of the market share, they must

create their own niche market that is unique.

b. Tactic: Punch is one of the few US members of Associazione VeracePizza

Napoletana, has ingredients flown in, and has a different atmosphere from most

restaurants. They do not compromise on some things, such as additional

ingredients that would make them similar to American style pizza (Barrett).

5. Maintain their niche by marketing to “untapped” markets.

a. Purpose: To increase their market share they focus on their strengths. Women

are more likely to be looking for a smaller and healthier alternative to the

American style pizza, which is what Punch offers.

b. Tactics: Punch became the official pizza for women’s sports at the U of M in 2010

(Pucket, “Official pizza sponsor”). This untapped market lets Punch stick out and

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show that they care about their women consumer’s needs better than

competitors.

6. Ask for participation form customers in the decision making process

a. Purpose: Punch is using another strategy based on psychological research. The

rule of participation suggests that people will be more inclined to participate and

use a promotion if they had a say in creating it.

b. Tactics: Punch uses its social media platforms to pose questions to customers.

Co-owner Pucket updates the blog on posterous.com. On February, 9th 2011,

Puckett posed the posted, “Your ideas needed. We have gotten feedback that

big promos make it hard for “regulars” with long lines. What would be nice,

smaller scale deals to try out?” (Pucket, “Your Ideas Needed”). After getting 16

responses on the post, on Feb. 24th Pucket, posted again saying, “We also plan to

do more less crazy, but still nice, promos that last over a few days so the lines

don’t make it too difficult to participate. Like last week’s valentine promo where

we gave away over $100,000 of free pizzas over four days. Other good ideas we

got were to do free upgrades on an ingredient or special pizzas for our

connected customers or complimentary wines or other beverages. We also plan

to do some special tasting events this year for interested customers” (Pucket,

“Moving all Marketing Online”).

7. Tied in with community relations

a. Purpose: Give back to the community to show that the company is interested in

how the community it resides in does. It also helps raise positive buzz and feeling

around the brand.

b. Tactics: Have can food drives where customers bring a canned food in and in

return receive a free pizza. Donations went to Second Harvest Heartland (Ibis).

They also teamed up with Interfaith Outreach and Community Partners with the

“Pizza for Peter” event (“Pizza for Peter”).

8. Establish positive internal employee relations

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a. Purpose: To maintain positive interactions with employees which in turn will

affect their work output and attitude.

b. Tactics: Hire workers that have pride in their work. Ensure that each worker feels

important and respected in creating the end product. Pucket says that they have

a “rigorous apprenticeship system for its staff. It takes years to earn the privilege

of holding the pizza peel…you have to have real talent working these ovens.”

Another tactic Punch uses to create a united team effort is, that before a new

location opens, owners and the managerial team hand place the nearly 70,000

tiles on the ovens (Kaliebe).

Results

Social media and public relations sometimes receive criticism for not being able to provide

adequate return on investments or quantitative information because it does not directly lead to

an increase of sales. I will look at how the reaction from the PR industry, the social media itself,

and the turnout at promotions.

1. Minnesota’s Public Relations Industry Reactions

In 2010, The International Association of Business Communicators (IABC) gave Tunheim a

Bronze Quill award for their work on Punch’s social media. IABC recognizes local

communicators who, “are the best of the best in areas of Communications Management.” They

gave Tunheim the award for, “assist[ing] Punch Pizza in connecting with customers, interacting

with brand enthusiasts and driving foot traffic to their six Twin Cities restaurants” (“Bronze Quill

2010 Winners”). Additionally, the Minnesota blogosphere recognized Tunheim’s work with

Punch Pizza. http://justjudyjudyjudy.com named the Tunheim team as one for the top five

“social media titans” for their “social media and online strategies to make up for a reduction in

Punch Pizza’s paid marketing efforts” (Grundstrom). Another prominent blogger, Arik Hanson

stated, “[Punch] is using the tools at their disposal effectively to achieve their business

goals...increased brand awareness and more pizza sales” (Hanson).

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2. Success measured in terms of comments. Mentions, likes& retweets

As I mentioned earlier, Punch has around 14,000 fans on Facebook and 9,000 followers on

twitter. Those numbers alone indicate the success Punch had with increasing their social media

platforms but I thought it was also important to see what these fans were saying and how many

positive and negative interactions there were. The example below shows how Punch was able

to find out about a customer’s problem by seeing their name mentioned in a tweet and then

promptly responding.

This next example shows how a search on twitter allows Punch to monitor what customers are

saying in real time. These latest tweets mentioning Punch were pretty positive.

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This example shows how two-way communication could turn negative. These comments are on

a Facebook coupon Punch released for free pizza for General Mills employees.

Some customers got angry that they were not recognized and became even more upset when

Punch said to “lighten up.” This exemplifies how social media can be risky for companies.

Their actions get analyzed critically, their responses are made without much planning before,

and consumers’ negative comments spread fast. In a comment later, some Punch customers

stood up for Punch and point out that they are one of few restaurants that offer so many free

pizzas as it is. This supports the idea that social media “identif*ies+ passionate individuals and

communities” and can act as a positive platform where like minded individuals can feed off of

each other and connect over their passion for Punch (Erickson and Lilja).

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Promotion turnout: Lines Out the Door and Raising Thousands for Charity

-Traditional media has noticed Punch. In 2009, City Pages named Punch the 3rd most influential

restaurant openings of the decade (Hutton).

-Promos and coupons for free pizza draws crowds that are willing to wait in long lines.

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Some Numbers:

-Over $100,000 worth of free pizzas for 2011’s Valentine’s four day promotion (Pucket,

“Moving all marketing online”).

-Collected over $10,000 cash contributions for Second Harvest, Children’s Cancer Research, and

Peter’s Sleepout (Pucket, “Moving all marketing online”).

-Over 10,000 pizzas given away after the Vikings lost to the Saints (Weiche).

-54 online coupons via FlickR with 186,998 views (Hanson)

-525 comments on those FlickR coupons (Hanson)

-In the 2010-2011 U of M women’s volleyball season, 97 “meal deal” tickets were

sold (Lynch).

-In the U of M’s women’s basketball season, 574 “meal deal” tickets were sold

(Lynch).

Evaluation:

PUNCH IS STAYING AHEAD OF THE GAME

a. Digital Coupons:

i. Punch’s decision to market online was a smart choice on many levels. An

article from David Erickson, a team leader from Tunheim, sites a study

that found that there was a 300% growth in digital print coupons in 2010.

Punch is already ahead of their competitors who are just starting to

release online coupons because they have established their media

channels and built up their followers. Additionally, digital coupons have

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seen redemption rates of 5%-20%, compared to traditional coupon’s rate

of only 0.9%. Finally, digital coupons draw in first time shoppers more

than half of the time (53%) while traditional coupons are used by first

timers only 32% (Erickson, “Digital Coupons Poised For Growth”). Punch

is able to successfully expand and grow their target market without

increasing advertising costs.

b. Smart Phones:

i. Today there are more three times more smartphones activated a minute

around the world than babies being born ("Smart Phones & Devices Now

Growing 3X As Fast as Babies Are Born”) and a study found that nearly

25% of consumers are posting comments about their service while they

are in the store (Erickson, "25% Of Online Shopping Conversations Posted

In-Store”). This trend of checking in, tweeting, and status updates is only

growing. Customers are sharing where they are at and experiences (good

or bad) and Punch’s social media strategy will convey very well to smart

phones. Punch is very good at responding quickly to social media and

honoring coupons shown on smart phones.

ii. A suggestion for Punch to expand their smart phone market would be to

have deals on Foursquare. I couldn’t find any deals for “checking in” at a

Punch or when you are a mayor of one of the locations. Many other

restaurants use this and it helps create customer loyalty.

c. YouTube Videos:

( Hersh)

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i. On March 21st, 2011 Punch released their latest social media endeavor; a

YouTube channel. Co-owner, Pucket, created a YouTube video asking for

customers to share their “Punch Pizza story.” I think that this is taking

advantage of the YouTube marketing trend cited above and expands

Punch’s social media reach as they should. Here are the statistics of how

many people have watched the video as of April, 15th, 2011.

This video has the second highest views on their channel. I think that it is interesting

that no one has actually posted a video yet. It is a unique and engaging idea but I

question if Punch should have established a stronger platform on “PunchPizza.tv”

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before starting this campaign. I might have suggested using the YouTube channel

more for informational videos first, like videotaping how Punch prepares for large

giveaways, a behind the scenes look, or a time lapse video of the many customers

that come in for giveaways. This would have gotten customers interested in and

used to the YouTube channel first. I also was surprised that the PuchPizza.tv “share

your Punch Pizza story” was not a contest. It seems as if Punch is saying that they are

such a passion brand and customers are willing to interact with them even without

any incentives involved. Being able to interact with Punch would be enough of an

incentive on its own. If this is true and the promotion receives many video

submissions, it will be testimony to just how big of a following Punch’s social media

has created.

I hypothesize that Punch Pizza’s success with social media acts as a case study for other local

restaurants to follow to monitor and engage their customers. Overall, Punch’s decision to use

social media was successful because they are more experienced, have more followers, and have

better media channels built up than their competitors.

Evaluation with Fallon’s Principles of Creative Leverage

1. Always start from scratch.

When the CEO of Punch saw the negative comments about Punch’s closed system and low

interaction with customers, he knew he had to revamp their marketing strategy. Punch started

fresh from the start and immediately disbanded their no photo policy. They did a complete

turnaround by encouraging customers to post pictures of the restaurant for their first social

media contest. Punch was able to see their wrongdoing in having a closed policy when their

customers preferred social media, open policy, and two-way interaction. Their decision to start

with a new approach of a very interactive social media presence helped their creative leverage

and is a key piece of their success.

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2. Demand a ruthlessly simple definition of the business problem

Punch gave the customers exactly what they wanted. They discovered that the business

problem was that customers were unhappy with their closed policy. This simple definition

made it easy for Punch to combat the problem. They created an open policy that satisfied their

customers.

3. Discover a proprietary emotion

Customers like to have a connection with Punch. They like how Punch is a local business unlike

the other large pizza competitors. Because of the small size, customers want their experience

to be personal. This “personal” experience is the emotion that Punch’s customers find

significant and Punch discovered this by allowing customers to participate in decision making

and creating personal and specific coupons

4. Focus on the size of the idea, Not on the size of the budget

Punch’s focus was on how their idea would successful target, satisfy, and delight their

customers rather than the budget. For example, Punch’s medium for advertising was primarily

social media (which is, in fact, cost effective) but Punch advertised for a lot of free pizza

giveaways. Punch’s pizza production cost is higher than other fast food because of their higher

quality so these giveaways did not help the budget. However, they did help draw in new

customers to experience Punch (and come back for more) and established their social media to

have the followers they do today (9,000 followers on Twitter).

5. Seek Out Strategic Risks

Punch’s social media campaign is based on topicality and quick reactions. For example, when

the Twin Cities were hit with a big snow storm this winter, Punch offered free pizza to those

who could make it through the snow storm and started their “Snowmageddon” giveaway. They

gave away 5,000 pizzas. Their crowds got the attention of traditional news media, such as Kare

11, where Punch was featured on the 5 pm news hour. However, because these promotions are

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thought of without much planning ahead, they could also be a bust and not have a large

turnout. It’s a risk that Punch takes to capture their audience’s attention and stay newsworthy.

Additionally, Punch’s narrow focused coupons run the risk of singling customers out and

angering others. A case study of this is the coupon on Facebook for free pizza for University of

Minnesota students. With increased social media, bad word of mouth and negativity can be

spread and be seen easier. A comment by fan on the coupon said, “Yeah, that's beyond sucky.

Just because we aren't a monster campus in the cities every other school doesn't matter? We

have friends who need to be converted to Punch pizza too! But on that note, it's not very fair to

non-students either. Coupons should not discriminate!” They risk upsetting some but appeasing

a majority is a strategic risk Punch takes.

6. Collaborate or Perish

Punch needs to uphold its customer’s value of a personal experience but at the same time

needs to collaborate with other businesses and organizations to extend their reach and

broaden their customers. They have partnered with other local Minnesota brands, such as Surly

Beer and Izzy’s Ice Cream. Their strategic decision to collaborate with other well known but only

local Minnesota brands help maintain their brand image of being a personal and authentic local

brand. They recently became the official pizza for University of Minnesota’s women’s sports.

They are still maintaining their Minnesota loyalty and tapping into one of their primary markets,

women.

7. Listen Hard to Your Customers (Then Listen some More)

When the company came across the negative comments on the no-photo policy, the policy was

scrapped. It was more important to listen to customers wants and needs than keeping the

policy (despite the fact that the company did have valid reasons for the policy). Punch uses

their social media as at the platform to deal with complaints and serve their customers. For

example, a customer on Twitter said, “The experience I had @PunchPizza today tells me they're

more interested in table turnover than customer satisfaction or maintaining loyalty.” Punch is

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very good at monitoring and responding to their customers. They responded within the same

day with, “@beRt_MD please drop me a direct line jsp@punchpizza.com so i can understand

what happened. John”

Additionally, Punch actively seeks advice from their customers. When they heard complaints

about how long the lines were and how loyal customers, they posed the question to customers

of how they should solve the problem. This helps the problem two-fold because Punch can

listen to customers and customers feel more involved and appreciated when they participate in

the decision making process.

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