"Worst pizza ever": Domino's miracle turnaround
In late 2009 a series of previously confidential videos filmed by the Domino’s pizza chain made their way onto YouTube. The videos depicted the company’s internal focus groups, which Domino’s used to monitor how consumers felt about their products. Focus group recordings are typically made with a camera hidden on the other side of a two-way mirror. They take place inside windowless rooms, so that no one can hear what is going on. They remain closely guarded corporate secrets.
These video sessions were brutal. Consumers hated Domino’s pizza. In one video a woman said, “Domino’s pizza crust to me is like cardboard.” Another added, “The sauce tastes like ketchup.” “Worst pizza I ever had,” said a third.
One of the focus group attendees, a woman identified only as Adrienne, subjected Domino’s staff to a little speech in which she questioned whether Domino’s even understood what pizza is. In the video, her face bore an expression of bemused anger. “Pizza? Where’s the love?” she said. “Bread, sauce, cheese, fresh ingredients. Doesn’t feel like there’s much love in Domino’s pizza.”
Domino’s senior leadership watched the videos in dismay.
Marketing director Karen Kaiser reviewed some of the notes from the sessions. “This one is bad: ‘Worst excuse for pizza I’ve ever had,’” she said.
Looking at the videos, product manager Meredith Baker almost choked up. “It’s hard to watch,” she said. Consumers liked almost nothing about Domino’s pizza. Not the sauce. Not the cheese. Not the bread. The crust quality came up repeatedly.
“The ‘cardboard’ complaint is the most common one,” Phil Lozen, a Domino’s PR executive, said gloomily.
The videos merely confirmed the trouble that Domino’s management already knew it was in. Sales were in heavy decline. The company had lost 15% of its revenues in the prior two years.
Domino’s, and its 9,000 franchise restaurants worldwide, were slowly imploding.
So president Patrick Doyle decided to do something about it. Printouts of customers’ negative reviews were posted all around the offices in Ann Arbor, Michigan, so that no employee could be under any illusions. “Boring, artificial imitation of what pizza can be,” said one note. “Crust seemed lacking,” read another.
Doyle asked his corporate chefs to remake the company’s core product from scratch. The executive kitchen staff tried ten new crust types. They created 15 different sauces. They reviewed dozens of new cheeses before they got it right. “They were working day and night and weekends to get it done,” Doyle said.
The reason we know all this is that in early 2010 Domino’s relaunched its pizza and turned the awful internal videos into an ad campaign. They promoted their former failings. Like a recovering alcoholic hitting rock bottom, Domino’s asked for forgiveness, to be given a second chance.
People were charmed by Domino’s honesty. Sales rebounded by 16.5% almost immediately. With the new growth, Domino’s stock exploded upward. For the prior two years, Domino’s shares had been worth less than $10 each. Suddenly, they doubled in price. Then tripled. Then tripled again. At the time of writing, Domino’s stock traded for $530 per share.
“THIS IS NOT ACCEPTABLE”
Domino’s pizza turnaround campaign is one of the boldest and most unusual product relaunches in history. It may be unique.
It was also a logistical nightmare. All the ingredients changed, which meant all the supplies had to change. The recipe changed, which meant all 9,000 Domino’s franchise locations had to learn new instructions for cooking the new recipe. After the pizza launched, Domino’s went on to redesign every single delivery box. Domino’s employed about 180,000 people at the time of the turnaround. Every single one of them, at some point, was asked to do something new and different to make the plan work.
But they didn’t stop there. A later video published by the company shows Doyle holding a framed photo of an appalling pizza sent in by an unhappy customer. The lid of the delivery box has been squashed flat onto the pie itself, rendering it inedible. Doyle makes a solemn vow to the camera. “This is not acceptable. Bryce in Minnesota, you shouldn’t have to get this from Domino’s, we’re better than this.”
The company’s ongoing ad campaign then showed Domino’s staff tracking down unhappy customers, including Bryce—people who had written scathing online reviews. One video showed a Domino’s team stalking a former customer named Bill Johnson to his house. They plastered his neighborhood with flyers that said, “Bill Johnson, you’ll love our new cheese!” Besieged, he eventually relented, opened his front door, and ate a free slice of the new pizza on his doorstep. Of course, he loved it.
The campaign was designed by Crispin Porter + Bogusky, an ad agency known for its off-the-wall ideas. You can dismiss all this as clever marketing, but that would be missing the point: A large part of being in business involves clever marketing. Being clever at marketing is a valuable skill. And what was being marketed was real: Domino’s executives really did admit their pizza was garbage. They really did ditch everything and start again from scratch. “We basically had to start over to get it right,” Kaiser, the marketing director, said.
But the real joy of the campaign is watching the Domino’s staff defend and advance their new product. With the pizza fixed, they’re raring to get out there and introduce it to the world.
see in good leadership. It’s worth boiling down Domino’s plan to its basics, because it is a great example of what good leadership looks like at a company that needs to change:
• Management admitted it had a serious problem and that doing nothing was not an option.
• There was no “just hoping” things might get better on their own.
• They were open and transparent with their own staff, and the public, about how bad the problem was. They didn’t try to cover it up with PR spin.
• They came up with a plan to fix the problem. The plan was clear, bold, and easily understood.
• Management was transparent about the amount of extra work the turnaround would create. People worked nights and weekends. They rebuilt the product from scratch.
• They had faith in Domino’s staff having enough talent and ability to improve the product. They gave them the creative freedom to completely rebuild the core product.
• They took a huge risk: Domino’s didn’t know that people would like their new pizza. They couldn’t force people to try it or to forgive them once it was available.
• Management stood up for the work, and by implication the staff who did that work. They defended the company and its product against critics. It is important for staff to see that their bosses have their backs. Doyle probably did more media interviews in 2010 than any other CEO on the planet.
• There was an important strategic purpose: Doyle, the president, turned the company’s biggest disadvantage—its terrible reputation—into its chief asset. • Although the videos were no doubt initially embarrassing for the company, they drew a line under the old Domino’s and thereby confined the problem to the past. The company was no longer held back by its historic baggage. Going forward, it was a new company making a fresh start.
Nothing Doyle said was particularly inspiring. He isn’t a great performer. He doesn’t look mercurial. He wasn’t projecting power. He didn’t walk onto a stage wearing a black turtleneck sweater, like Apple’s Steve Jobs delivering his legendary “one more thing” keynotes. He didn’t do a TED Talk. In the videos, Doyle wears a polo shirt rather than a designer suit or a silk tie. He looks like the person in the office cubicle next to you, not one of Tom Wolfe’s Masters of the Universe. If he lived next door to you, you would not notice him.
But Doyle had a great plan. He laid it out clearly. He didn’t bullshit his people. He set a clear goal for the entire company. And he stood up for the work. This is what good leadership looks like. Anyone can do it.
You can do it.
This is an extract from Say Thank You For Everything, the new book by Jim Edwards, former editor-in-chief at Insider. Jim helped transform a small unread blog into a business with 200 million readers and hundreds of employees,which finally sold for $442m.