Amplifying Weak Signals
Ted’s Pizza Place in Conshohocken, Pennsylvania is the Advantexe team’s go-to resource for “Pizza 
Fridays,” but it’s been quite a few years since I’ve been there on a Saturday afternoon. I remember taking my two sons there after a soccer game, or some sort of event, but that was at least ten years ago. My recollection was having to wait for a table as Ted’s Place was always packed. But not this Saturday in 2016. It was lunchtime and I was the only customer in the parking lot and the store.
As I waited for my pizza to be ready, I started talking with Ted, the owner, who was going through his pizza-making-ritual of ensuring sure my pizza was perfect by inspecting the bottom for the right crust consistency, rotating it, taking it out of the deep pan, placing it directly in the oven, and then finishing it back in the deep dish pan again. I asked him how business is, and he replied that he is doing well, but it’s just not as well as it used to be.
As I am always looking for new insights and learnings about business, I engaged in a dialogue with him to discover something new to share.
“I’ve been making pizza here for 33 years and things have changed a lot over the past few. It used to be that no matter what, people would always want a good pizza, or a good family meal. Nowadays, there are very few customers who stop in and care about quality ingredients and a quality process of cooking. But understand, I am not losing business to Pizza Hut or anything like that, it’s more of the fast food places and the big super markets who prepare their own food. But I can guarantee you that none of them make their own pizza sauce every day from fresh tomatoes and a recipe that my mother brought over from Greece.”
I continued the conversation and asked Ted what has changed.
“The big thing that has changed over the past couple of years has been the increased cost of ingredients. I use a special secret family recipe to blend my cheese in a certain way so that it works with the homemade sauce which is already cooked so it doesn’t make the pizza dough soggy. I can hardly make money because the costs of the cheese keep going up and I will never change the recipe to make it a cheaper blend. This is where the big stores with all of their buying power can get better prices and make money that I just can’t match.”
It was an interesting conversation so I evolved it to asking about social media and marketing. Ted shared that although he does have a Facebook page he doesn’t use it too much and he said that it’s not something he knows too much about. “I used to think the good food was all we needed…” and then he just trailed off and boxed up my pizza.
The five minute conversation was just as good as the amazing pizza. When thinking about business acumen and developing the skills needed to assess markets, develop strategy, execute strategy, and measure performance, Ted’s story and situation is really not that much different from the challenges faced by global billion dollar Pharmaceutical, Chemical, Technology, Financial Services, and Professional Services organizations that we work with at Advantexe every day. These critical business acumen issues are:
- Changing customer needs
- Increasing costs of raw materials
- Increasing buying power of large competitors
- Weak investments in digital and social media marketing
Ultimately, whether you are Ted’s Pizza, or a top 10 global brand, your business simply must embrace business acumen skills and culture to proactively listen for “weak signals” and then take the information and turn it into action.
Here are a few thoughts related to listening to the weak signals and what sort of actions organizations should take:
When you hear the signal of changing customer needs…
Ted is (still) making high quality, hand-crafted, precision pizzas and other specialty foods, but customers do not appreciate it because the market is saturated with poor quality food and they just don’t know better. When you hear this weak signal, you must do everything possible to aggressively focus on and find your customers. Customers who care about quality and a leading product.
When you hear the weak signal of increasing costs of raw materials AND increased buying power of competitors…
Without the bargaining power of being a market giant, you must do several things. First, given that you will not sacrifice quality, you need to look for and negotiate with distributors who are providing the best deals. You should also look for other resources such as industry-based group purchasing organizations where small buyers can come together and create some purchasing power. The other thing you have to do is start preparing customers for price increases. The costs of the raw materials is going up for a reason and you need to have the flexibility of passing them on to customers and the ecosystem as well.
When you hear the weak signals that digital marketing and social media is changing everything in your market…
You need to invest in digital marketing and social media. It is not a “nice to have” or a “cool to have,” it is an essential to have. Every customer segment – not just a small few - now use social media to gather information from things as basic as phone numbers to reviews of products and services. And when I share investment, I really mean an investment with a real ROI and business impact.
