How Domino’s Went Upstream to Build an $11 Billion Business
Domino’s was founded in 1960, and using their 30 minutes delivery promise they quickly became the dominant force in pizza delivery.
For the next half century, their main notable advance was the invention of the spoodle, a flat-bottomed ladle for spreading sauce.
Throughout that time they were laser focused on the downstream challenges of running a vast franchise business, and the logistics of rapid pizza delivery.?
But by 2007-2008 things started to go very wrong.
Domino’s share price collapsed from $30 a share in 2007, to under $4 in 2008.
To find the problem they needed to go upstream, so they asked their customers.?
And the news was not good.
Their pizzas were terrible.
Customers were saying things like: “The crust tastes like cardboard. The sauce tastes like ketchup.” And: “This is an imitation of pizza.”
Patrick Doyle, the CEO said at the time, “When we did consumer tests, if they knew the pizza was Domino’s, they actually liked it less than if they just thought it was a random unbranded pizza. We had somehow created a situation where people liked our pizza less if they knew it was from us. So yeah, that was a problem.”?
Domino's had lost sight of the fundamental part of being a pizza company - the pizza.
Acting Upstream
Domino's had to make some dramatic upstream interventions to fix the situation.
So the culinary teams started experimenting.?
They improved the quality of the mozzarella and flour, added garlic butter to the crust, and gave their marinara more flavour.?
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18?months of development later they lunched a new and improved pizza.
By February 2010, Domino’s was selling so much more pizza that they almost ran out of pepperoni.
Even with the struggle to handle the surge, sales rose more than 14?percent in the first quarter of 2010.
Since then Domino’s have been on a sustained growth trajectory. The share price is currently running at $400 a share and their market cap has grown from $0.2 billion to $11 billion.
Delivering Continuous Improvement
Just like the results at Domino’s, restaurants that make effective customer experience changes see significant results.
In 2009 it took Domino’s 2 years of falling share prices to highlight the problem, months of customer panels to uncover the reasons, and 1.5 years of development to fix it.?
Today with real time guest experience insights, Yumpingo helps highlight and action issues like this in just months or even days.
Yumpingo's insights have shown that that food is 5X more important than service and 8X more important than ambiance in driving customer satisfaction. That’s why collecting customer feedback at a granular level by menu item and their characteristics is essential.
So restaurants can now understand in real-time when food issues are happening across their estate, down to a venue or shift level.
You don’t need to wait for problems to show in your share price or sales data before acting upstream.?
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” ―?Buckminster Fuller
Co-Founder & COO at Yumpingo
5 个月https://www.youtube.com/watch?v=AH5R56jILag? For more background