COST OF CRITICISM IS LESS THAN COST OF FAILURE

 

Domino's Pizza has seen remarkable growth over the years and is one of the pioneers in the fast-food industry. It has dominated its rivals and has created a loyal base for itself. It has also given exceptional returns to its investors over the years. In the period from 2009 till 2017, its share price rose by 2000%, and this is because Domino's Pizza accepted its mistakes and rectified them.

The Debacle of 2009

In 2009 the American economy was recovering from the economic crises of 2008, and the companies started showing signs of recovery, but Domino's Pizza shares plummeted to a rock bottom value of $6. The company's share value touched its all-time low; the loyal fans of the pizza giant were leaving, and the company faced harsh criticism about the quality and taste of its pizzas. When other businesses were showing signs of growth, Domino's Pizza was on the verge of crashing.

What was the Problem?

Domino's Pizza was being criticized for the quality and taste of their pizzas. Even the loyal fans were criticizing and were changing their loyalties. People across America said that their pizzas tasted like cardboard and their sauce was worse than any low-grade ketchup available in the market. Critics of the brand added spice to the story and made matters worse for the company. Domino's Pizza saw a decline in customer base, and the sales soon took a downward trend. Domino's Pizza also ranked last in the Consumer Brand Preference Survey that year.

How the Recovery Began?

Instead of ignoring the issue, Mr. Patrick Doyle, (ex-CEO, Domino's Pizza) implemented the policy of 'Brutal Honesty'. He rigorously worked with his team for nearly 18 months and scripted one of the best comebacks of the business world.

To start with, he and his team interacted with the customers and critics of the brand and noted all their issues. After that, the chefs at Domino's Pizza completely changed the recipes from the ground up. Every possible combination was tried day and day out over the next 18 months. The chefs worked seven days a week to come up with their best recipes. The pizzas were changed completely, and all the feedbacks were taken into consideration.

Also, the 30 minutes delivery policy compromised the supply chain of the company. Most of the ingredients were canned, frozen, and pre-made, thus hampering the taste in a bid to make and deliver the pizza on time. The company's management rectified this issue and changed the entire supply chain of the company spanning 9.93 million square kilometres and more than 4200 stores. The full inventory management, storage, and transportation system were changed to use the best and freshest ingredients.

The company lastly launched the "Oh Yes! We did it." Campaign wherein they documented their journey of the past 18 months and how they changed everything. On the company's website, they posted videos of critics and how the company acted upon that. The company's head chef even delivered pizzas to its most prominent critics and took their feedback. The complete journey was documented, and Domino's Pizzas accepted its failure in public and then revamped itself to regain its lost glory.

Back to the Top

After the campaign launch, Domino's stock rose by 44% in a month and 75% in that financial quarter. This growth continued, and by 2017 a massive jump of 2000% in stock price was witnessed. This growth was even more than the giants like Amazon, Apple, and Alphabet. In terms of publicity, their campaign is gained over two billion media impressions to date.

This story highlights how embracing criticism and turning it into an opportunity can change the destiny of the business. Customer criticism is a part of the business, and the cost of criticism is less than the cost of failure. Doing nothing despite knowing the complaint is dangerous. Publicly accepting and acting upon it is a must. Also, offering discounts and coupons will not cover up the flaws in the business and help in marketing. Instead, connecting with customers at a personal level will go a long way in achieving success.

Hence accepting mistakes is like a long-term investment in the business.

 About the Writer

Ashwik Sharma

Pursuing PGDM at IMT Hyderabad

An Automobile enthusiast and Cricket fanatic, intending to make a career in Finance writes about the Dominos' strategy of brutal honesty.