Even in Italy!
If we had to talk about just one product from the food sector that represents Italy around the world and of which we Italians are, rightfully, proudly protective, we could only think of the pizza. Yet, even in our Country, since 2015, one of the U.S. chains with the most extraordinary success story in delivering pizza delivery: Domino’s Pizza.
Anyone who has tasted any pizza made in USA knows very well that it is a very different product from the Italian one, with quality standards that are definitely lower, at least for our taste, but this has not stopped the company founded in 1960 in Michigan from having a success ever-growing success even in Italy.
The business strategy we will try to analyze in this article has been, in many ways, surprising and, in some aspects, even daring, and it shows, in our opinion, how a management team with a clear vision and the ability to address concrete problems without fear of taking risks can lead their company to results of absolute excellence.
Delivering pizzas quickly
The first step of this success story is, without a doubt, marked by the famous slogan "30 minutes or free pizza" which promised to give away the pizzas delivered if more than thirty minutes passed from the moment of the order. There is no doubt that pizza, on both sides of the Atlantic, is synonymous with substantial food, low cost, and is suitable for quickly satisfying the hunger of the whole family. This is why the idea of having a pizza delivered quickly when hunger strikes after a workday, during a study break, or in an evening with friends has satisfied the needs of an increasingly large customer base since the 1960s.
In fact, Domino’s Pizza was one of the first companies in the world to apply the delivery model for marketing its product, leading to significant growth in franchise stores, eventually reaching around 300 stores in the USA by the early 1980s, also thanks to a strategy of acquiring smaller competitors.
At this point, however, the competition from another giant of pizza made in the USA, Pizza Hut, and some difficulties with the product quality led to a significant drop in sales and a crisis from which the management of Domino's Pizza managed to exit creatively, with a move that was, in some ways, truly surprising.
Acknowledging your limits to start improving
The main problem that, towards the end of the last century, led to a sharp decline in sales for Domino's Pizza was clearly identified by the management at the time: the product quality was poor and customers could clearly perceive it, preferring the better pizzas from other chains, such as the mentioned Pizza Hut.
The reaction to this quality issue in a company that had bet everything on delivery speed for its growth in the USA market was brilliant from a communication standpoint: in fact, a campaign was launched in which Domino’s Pizza publicly admitted that it was aware of the low quality of its product and that it had decided to improve it, with the involvement of the customers.
Humility is a quality often underestimated in the business world, but admitting your limits and working hard to address them is a fundamental trait for every successful manager. And, of course, whether or not to let your customers know about it is an extremely delicate communication and marketing decision.
"How will our potential customers react when we tell them that we know we’re not excellent? Will they appreciate the honesty and the desire to improve, or will they see us as losers?" The fact that Domino's Pizza’s stock prices rose from $2 to $180 in seven years shows that the transparency choice made by the management was a winning one. However, it was not the only reason for this extraordinary performance.
The customer at the center with digital
The promise to improve the quality of their pizzas was accompanied by the one, which might have seemed rather generic, to involve customers, putting them "at the center" of the company’s mission. Even in this case, the risk of making somewhat empty promises and, consequently, harming the brand’s credibility was significant, but the management proved to be capable of acting with extreme concreteness, seizing the opportunities that were opening up thanks to the digital revolution.
The first way to be close to their customers and put them at the center of their business was by introducing, for the first time in the world, in 2007, the ability to order pizza online, first via PC and soon after through smartphones. It may seem strange that making a more "impersonal" mode of interaction between company and customers available could make customers feel at the heart of Domino’s Pizza’s improvement efforts, but the fact is that this addressed a widespread and real need that was increasingly emerging globally.
Some tools that are now extremely familiar to us thanks to food delivery apps were first introduced by Domino’s Pizza. Just think of the Pizza Tracker, the system that allows the most impatient customer to track the preparation status of their pizza, or the app, launched in 2014, to create a customized recipe, giving vent to that creative desire that arises, sooner or later, in all pizza lovers around the world.
Towards the future
This business strategy is still continuing today in an extremely consistent manner, and it is now possible to order a pizza from Domino’s via Messenger, with a tweet, using a smartwatch, Google Home, or Alexa.
Furthermore, following a developing trend, Domino’s Pizza has reached an agreement with Ford to order a pizza while driving, thanks to the connectivity tools available in the vehicles of the American giant, and is experimenting with product delivery using driverless cars or drones.
It’s not guaranteed that all the innovations the company is experimenting with will succeed in the future, but what we want to emphasize here is how a management team with a big-picture vision of the company and the markets, capable of getting to the core of the problems and addressing them with humility, knowing how to take necessary risks, has managed to lead Domino’s Pizza through its sixty tumultuous years towards increasingly challenging milestones. Not least of which is successfully selling an American-style pizza even to us Italians!
