The pizza or the box?

Call me crazy, but I've always liked Domino's pizza. I remember growing up and sitting in my father's camera store and enjoying some of their thin crust pizza while the hours passed waiting for the store to close. We kept kosher at home and never ordered in, so having Domino's was a real treat.

Admittedly, Domino's was a go-to for me during finals when I was an undergraduate student at the University of Maryland. As I was cramming and stress eating, I'd order Domino's to my dorm room, always the same order: a medium thin-crust pizza with pineapple and cinnastix (again, don't judge).

Aside from the nostalgia and pure habit, it was clear that the quality of the food was suffering. The pizza would usually arrive lukewarm and just edible enough not to send it back. The product itself was nothing special.

It turns out that I wasn't the only person feeling this way. In the 2000s Dominos was facing stiffer competition from Papa Johns and other fast-food restaurants. When competition started to impact their business and marketshare, they asked a very important question: is our problem the pizza or the box? In other words, is our marketing the problem (the quick(er) fix) or it is that our product is the problem (much harder fix)?

Here is what they found out:

The answer was that the pizza was the problem. They had a sub-par product and that's why the competition was starting to eat their lunch (no pun intended). As you saw from the short YouTube video, in 2009 Domino's re-did their entire pizza recipe, essentially starting over to make a new, better tasting, pizza. The initiative was marketed as, "Oh Yes We Did". The company owned the fact that many customers thought the pizza was terrible, enough for them to start from scratch.

I have to give kudos to Patrick Doyle, the CEO of Domino's during this turnaround who left the company at the end of June. The results speak for themselves:

Image courtesy: Finance.google.com

The lesson from Domino's is that there comes a time where leaders have to ask the simple but important question: Is it the pizza or is it the box?

We have to ask this question in business all of the time. If we want to grow revenue or increase marketshare, should we start a new marketing campaign or is the issue that our customers are not recommending us because our product is terrible? As most of us know, word-of-mouth is still the most effective marketing.

The good news is that thanks to sites like yelp, google, facebook and others, we don't have to pay for expensive focus groups (although I am a big believer in the need to do research and sometimes focus groups are, in fact, more helpful) to know what our customers are saying about us. For better or for worse, we can know whether customers are having a 5-star or a 1-star type of experience with our business.

I've been in positions in the past where we had to face the tough reality that we had to fix our "pizza". Often, leaders have to go through the 5-stages of grief before they can fix the issue. Leadership groups often have grown so connected to their product and believe in it so deeply that changing it seems like heresy. But once they accept that it doesn't represent the business well and can get better, possibilities open up (financial decline helps create urgency as well).

When we addressed our product and improved the customer experience at the urgent care centers we saw instant results and a strong turnaround in the making. Changing the experience fundamentally was a good choice at the time and improved our revenue by more than 50%. It takes experience, judgment, and some luck to understand when you need to dig-in and fix your product or when marketing is really the issue.

Never rest thinking your product will always be superior. Give the customers credit. They will tell you when it is time to work on your "pizza". I once knew someone who always said, "If they only understood, they would agree". To me, that is a non-empathetic, about to go out of business mentality.

Don't be like that guy. Stay hungry and listen. It is our job to listen and understand.

KEY TAKEAWAY: Listen to your customers. They will tell you if your product is failing them. If it is, jump in and change it. Let them know you listened to them. They will thank you for it and come back to you for another try.

If you were on the edge of your seat to see how the Domino's customers who were most critical in their focus group reacted to the new pizza, please watch this video:

This post is also appears on my website, "Leadership as a practice". Please visit the site at https://www.jonathansachs.net. You may subscribe with your email address using the "follow" button at the bottom right of the site.