Professor Abbie Smith spoke with Domino's CEO Patrick Doyle about the pizza chain's comeback and Domino's use of social media in its marketing.
Smith: You've been with Domino's for 14 years. You've seen it go down and you've seen it go up. What did you learn from that roller coaster?
Doyle: Market shares change when times are tough. It's tougher to take share or give up share when times are good. When you go into a downturn, companies do one of two things: they either batten down the hatches, cut costs, and get extremely conservative, or they look at their situation and say there's something wrong with our go-to-market strategy and they take the opportunity to fix it. The one thing you can't do is nothing. The recession allowed for some change in the business that wouldn't have happened, or would have happened but not with the same sense of urgency.
Smith: In the late 2000s, Domino's was heavily in debt, its pizza was near the bottom in taste, according to consumers, and a lot of people wrote the company off. How did Domino's end up in that position?
Doyle: We always had perceived our strength as quick delivery. We're the 30-minute guys. We offered good value and an adequate pizza. Our point of differentiation was "we do it faster" than anyone else. In 2007 and 2008, we launched a new message, "you've got 30." Consumers yawned. We thought it was dead-on strategy that could take us back to the heyday of the 1980s. It failed miserably. We got into a room and said, "We've got a problem." There was this big hill we hadn't taken before, which was the perception of the pizza's quality. We took our time to make sure we had it right. It took 18 months. Once we knew we had a pizza that was dramatically better than anything else out there, we went back to the consumer.
Smith: You seem a very resilient, nimble executive. Do you consider those characteristics crucial to running a company?
Doyle: It's important now to have a sense of who you are as a company, how you're going to listen to the world and respond to the things that happen. Your ability to control the environment is much less than it used to be. As much as you want to put a plan in place and drive the plan, you have to respond quickly to opportunities.
Smith: Social media is a big part of Domino's marketing strategy. Is social media turning this 50-year-old company into a modern brand?
Doyle: Absolutely. Go back to the 1970s and 1980s. Big brands could simply overwhelm consumers with their message. The message was whatever the company said was the truth. Consumers weren't in a position to respond, they didn't have the ability to control perception of the brand like they do today. Now, consumers tell thousands of people when they have a good experience or a bad experience. It's a very different dynamic between companies and brands and their customers.
Smith: You've had a big couple of years since taking over at Domino's. A tripling of the stock price and Chain of the Year for the last two years according to Pizza Today magazine for Domino's, and, for you, CEO of the Year from CNBC and now a Distinguished Alumni Award. What's next?
Doyle: You work hard to try to keep generating great results. I know math well enough to know that you cannot double your stock price indefinitely. We have some very specific goals for this business and, if we can do those things, it will be rewarding for our shareholders. We want to build a business and a brand and a company that generates fabulous returns over a long period of time. Can we generate outsized returns? I think we can. ■
Photo by Beth Rooney