You would be hard pressed to find a bigger turnaround story than that of Domino’s Pizza (#19).
Just three short years ago, a survey of consumer taste preferences among national chains showed Domino's to be falling well behind the pack in the ultra-competitive pizza market. By the end of the 2009 calendar year, Domino's announced plans to entirely reinvent its pizza. It was at that point the company took drastic measures, including publicly denouncing its own product in the media through an ad campaign in which consumers were filmed criticizing the pizza's quality. The company also ran a simultaneous campaign chronicling Domino’s chefs developing a new pizza recipe.
The risky moves paid off and by May 2010 the company was celebrating an unprecedented reversal of fortune marked by a historic 14.3% quarterly gain.6 And, despite slowing down a bit from the height of its breakneck growth speed experienced at the beginning of the year, Domino’s recorded $5.6 billion in global retail sales over all of 2010, a company high.7 The turnaround was so impressive that J. Patrick Doyle, Domino’s CEO, was named best CEO for 2011 by CNBC.8
In addition to a new recipe, embracing technology has been a large part of Domino’s resurgence.
In June 2011, Domino’s launched its new Domino's App for the iPhone and iPod touch offering customers the ability to order from virtually all of Domino's U.S. locations without a required login. Twenty-eight days after the launch the app achieved $1 million in total sales, and by September, just three months after its launch, the company announced that the app was achieving $1 million in sales over a single week.9 Both milestones were met much faster than expected according to Russell Weiner, Domino's Pizza Chief Marketing Officer. “The most exciting thing about reaching these accomplishments so quickly is that the Domino's App is still in its infancy. This is happening much faster than we expected, and it's a credit to the ordering experience and convenience our app offers,” he says.
Furthermore, the franchisor is very active in social media and looking forward to where the medium takes them next. “Social media is where our brand is moving,” CEO Doyle reveals. “If you look at the advertising we do today, it's a reflection of what is happening in social media, as opposed to a mass-media strategy that is supported by social media.” This strategy includes efforts to continue proving itself to the masses following past public relations gaffes such as allowing customers to voice their opinions in a live Twitter and Facebook feed on its website where the only editing is to eliminate vulgar language to show itself as a transparent company.
However, Domino’s has been utilizing technology in its operations for several years through an online ordering system that has been nationally operational since 2007. The system has proven to be integral to the company’s turnaround.
“Online ordering has clearly grown faster than we expected it to grow,” says Doyle. “We thought it was going to build over time and be a nice part of the business, but we realized that it is such a better experience for the consumer. Order accuracy is higher because they are taking their own orders on the items they are choosing. [Plus,] people spend a little more online than they do over the phone. They have the menu in front of them and it reminds them that they can get other things like lava cakes. It's [also] a critically important part of our customer feedback. We consider that if you complain online, we treat that the same as if you called us with a complaint. We will see it and get back to you.”
Furthermore, the combination of its social media presence and online accessibility increases the probability of sustain an extended relationship for Domino’s with its consumers.
“Another benefit of online ordering is that our consumers are living online,” according to Doyle. “Social media is more important than traditional mass media like television or radio, so it's somewhere we have to be. And, it's a very easy thing for us to transition from a conversation with consumers online to them placing the order online.”
Looking towards the future, Domino’s is gearing up for pushes into India, England, and Saudi Arabia. According to Doyle, at some point this year there will probably be as many international locations as there are locations in the United States. Stateside, he sees Domino’s more gourmet options gaining more traction with consumers who are looking for a convenient way to get a meal that falls between fast food and upscale dining. Wherever Domino’s goes next, it will be interesting to see how Domino’s builds upon the momentum it has picked up over the last few years.