By Margaret Littman

When Varol Ablak first heard about Pizza Pizza, a Toronto-based pizza chain using a call center to manage its delivery orders back in 1991, he didn’t imagine that his chain might someday become a pioneer of sorts with the technology. Ablak was interested in building a call center for his Pittsburgh-based concept, then called Pizza Outlet. But at $250,000 for start-up expenses, his then-small chain couldn’t support the investment, particularly when a traditional point-of-sale system then cost just $10,000.

Thirteen years later, those familiar with call-center technology say Ablak’s chain, now called Vocelli Pizza (Chain Leader, March 2004), may soon be the first U.S. restaurant chain to implement it nationally. Like Pizza Pizza in Canada and La Rosa’s Pizzeria in Cincinnati, a number of pizza chains have successfully implemented call centers on a local or regional basis. Even some franchisees of the big brands such as Pizza Hut and Domino’s are testing it.

A Number to Remember
For mom-and-pop restaurants who came of age competing against the national players by emphasizing their local roots and hands-on customer service, the idea of outsourcing order-taking to a remote location, with a nonlocal phone number to boot, may seem counterintuitive. But Ablak and others say the benefits of professionally trained customer service representatives answering calls can’t be understated.

Dave Ostrander, an Oscoda, Mich.-based pizza consultant, says with the growing use of cell phones, a memorable toll-free number has more appeal than a local number. Ostrander estimates that Pizza Pizza’s sales went up 35 percent once they started using a central phone bank.

Return on Investment
Vocelli Pizza first tested a call center with six Pittsburgh units for eight months in 2000. Ablak, who is co-founder, president and CEO, spent between $200,000 and $250,000 on the setup and immediately considered the investment worthwhile: Same-store sales were up 10 percent over those units that did not have delivery orders coming to the call center.

Since then Vocelli has invested about $800,000 on its call center, building a Pittsburgh facility with cubicles, phones, software and connections to all of the stores for which it takes orders. Currently 39 of Vocelli’s 106 restaurants use one toll-free number linked to the call center.

Comparable-store sales are up 10 percent in Vocelli Pizza units that are using the call center.

By 2010 Ablak wants to have 1,000 Vocelli Pizza stores nationwide, all using the same 800 number for delivery. Because the current call center is maxed out, Ablak is looking to build another 200-seat center. By the time Vocelli reaches the 1,000-store mark, he expects to have multiple call centers, but all delivery data will still be sent to one central location and, of course, there will be one phone number for customers.

While the initial investment was significant, adding new stores to the system means just small, incremental costs. So the call center makes the most sense for those who can realize the economies of scale, as Ablak wants to do. Chains with fewer than 10 units typically cannot justify the initial investment, says Mike Pariseau, director of product and design management at OneSystem, the Santa Barbara, Calif.-based maker of the call-center software, which also includes all the typical POS features.

Talking Points
Ablak is sympathetic to existing franchisees who have already invested in phone lines and POS software, and he isn’t pushing them to convert to the call center yet. But new franchisees are required to sign on. In fact, Ablak attributes selling new franchises in Georgia, Florida and Virginia to the call center, because it reduced start-up costs for franchisees with multiple locations. “We sell pizza, but we also sell franchises, and this helps sell both,” he says.

On average, franchisees see a 2.5 percent drop in labor costs, worker’s compensation fees and taxes with the move to the call-center system, in part because they don’t have to pay and train employees to take phone orders. The average pizza shop has at least five phone lines for taking orders. When a unit is busy, the workers on the line and even the drivers pick up the phone. With the call center, franchisees are assessed a fee of about 65 cents per transaction, which Ablak estimates works out to about 4 percent of sales.

Additionally, volume has increased an average of 1.5 percent for franchise stores using the call center. Call-center employees, who are trained for two weeks, can process orders more quickly than on-site staff. Pariseau says the average call-center employee can take an order in just 90 seconds. In contrast, staff turnover in the pizza business can top 130 percent, so assuring accurate and friendly order-taking all the time is almost an impossibility.

“What is rampant in food delivery is that you are asking employees at the store who are making food to also be bright and cheery and helpful to customers who call and interrupt them,” Pariseau says. “That doesn’t happen with a call center.”

In addition to the time savings, because the call center is staffed 9 a.m. to 3 a.m., it can take orders before many Vocelli units open. Businesses can place orders at their convenience and know that they will be delivered when they need them. They no longer have to wait for the store to open and place the call in the middle of a meeting or hope that a fax order went through.

Pariseau notes other call-center advantages: They reduce the costs of misprinted coupons and fliers, because there is only one phone number to include on all marketing materials across the country. And companies can track each store’s performance—from delivery times to sales volume—from one location.

Customer Service Still Sells
According to telephone surveys the chain conducted during its test period, 90 percent of Vocelli’s customers like the efficiency and the professional training of a call center, and few have balked at using a toll-free number. Of the 25,000 calls that come into the center each week, 5,000 of them are not orders but complaints, compliments and questions, such as asking for directions to a store for a carryout order. The representatives are trained to handle them all.

Call-center employees, trained in customer service, can take pizza orders in just 90 seconds and handle guest complaints.

General managers, Ablak says, are even more delighted that they don’t have to deal with those phone calls.

Randy Fox was so impressed with the results from the call center with his 8-month-old Vocelli franchise in Virginia that he converted his other 6-year-old store to the system.

“This is a high-income area. The movie theaters and grocery stores pay $8 or $9 an hour. We can’t pay that to have someone answer the phone, so we ended up with high schoolers, and we weren’t even sure if they were going to show up, much less be polite when answering the phone,” he says.

The trained call-center staff will suggest beverages or different toppings on subs and pizzas, a touch that never happened when orders were taken in-house but has raised Fox’s average check slightly.

“Halloween was on a Friday this year, and there’s no way we could have dealt with it without the call center. People would have had to wait or gotten a busy signal, and we would have lost customers,” Fox says.

Reality Check
Despite the upsides, Ostrander still has reservations about call centers in the restaurant business. He estimates that 1.5 percent to 2 percent of orders are problematic, and wonders if customers feel they can get satisfaction from complaining to a call center rather than to a local manager. Ostrander also suspects that diners feel less comfortable making special requests such as “light sauce on one half” or “deliver to the back door” from a remote order-taker.

Vocelli Pizza franchisees who use the call center pay 65 cents per transaction, or about 4 percent of sales.

“How fast you respond to complaints is how long you are in business,” Ostrander says. “You need to be able to fix things in a hurry, and if your customers have to go to a second party, and then have a third party call back, I don’t know. You have to give people a way to cut through the crap when they need to.”

Ablak says representatives at Vocelli’s call center will ask a manager to place a call to an irate customer when necessary. But franchisee Fox says the call center has both reduced the number of mistakes from his restaurants and has helped smooth ruffled feathers when they do occur. Anyone who calls with a complaint is automatically sent a letter with a coupon for their next order.

“The call center has time to talk to customers and find out what happened,” he says. “We were always trying to rush people off the phone so we could go back and make pizza. People don’t like to be rushed.”