The CX Angle Podcast: CX Winners – Domino’s
We are in the midst of a Customer Experience (CX) revolution and customers are demanding an enhanced experience. In this second episode of The CX Angle, NTT DATA Business Solutions Corporate Communication Manager, Jeremy Cross, and Customer Experience Account Executive, Ryan Kubec, discuss one of the winners in CX, Domino’s Pizza.
Read the transcript below or listen to the podcast.
(Jeremy Cross) Today we’re going to be talking about something we call CX winners and losers. We’re going to talk about who is really leading in the CX space and who is falling behind. In this episode, we’re going to focus on one particular company that really got our attention.
So when we think of CX leaders, we think of businesses like Apple and Starbucks and Tesla, Ritz-Carlton, maybe these companies that have white-glove service. You immediately go to them when you think about CX leaders. But today, we want to talk about a company that is setting a new bar for CX; not only in their industry, but in general. And when you look at it, it’s a little surprising. Ryan, the company is … what?
(Ryan Kubec) It’s the technology behemoth of Domino’s Pizza.
(Jeremy Cross) Domino’s Pizza, the technology behemoth, as Ryan said. It is true. We want to talk about Domino’s Pizza as a leader in CX. And, honestly, when you start to look at the bullet points underneath it, it’s hard to say that they’re not leading; that they’re not winning in what they’re doing.
Let’s take a look at their history really quickly. In 2008, their shares bottomed out at under $3 per share. And in 2010, they launched their pizza turn-around campaign. And you might remember this; it’s where their CEO, Patrick Doyle, is on TV doing commercials, reading customer comments such as, “Worst pizza I’ve ever had” or “Sauce that tastes like ketchup.” And in 2010 they recognized, our product is not great, and we’re listening to our customers; we know we need to change. And they do – they change the recipe. But changing the recipe in the pizza industry is not enough to drive positive results. I mean, it might be the catalyst that they needed; it might be something that has to be changed, but moving forward that’s not going to correspond with the growth that they’ve had.
When I mention growth, here’s a staggering number. Ryan, did you know that since 2009 Domino’s has doubled their market share from 9% to 18% in 10 years?
(Ryan Kubec) Doubling your market share in 10 years. I think most companies that we consult with would love to follow that strategy; to say, we’re going to have double our market share. And 9% was a pretty small market share in that industry.
But, you know, I think they acknowledged probably some of the reasons why it was so small and that type of turn-around is not common, a lot more common that you’d see companies that are going down that path, they kind of fold or they get acquired and someone else takes over with a different strategy.
Their example, I think, is one that folks can resonate with, because talking about a complex manufacturer that sells to another production company — people don’t understand that in their day-to-day life and it’s not as applicable. So I try to pull as much as I can out of some of the world that we live in and use examples that people can see in their day-to-day life. And Domino’s is one of the best ones, I think, because you don’t think of pizza companies as being technology companies or technology driven.
And that’s exactly what I’m going to paraphrase. What their CEO said was, “We’re not a pizza company. We’re a technology company that happens to make pizza.” Go back and look at their commercials. They don’t even promote pizza. In fact, I think not too long ago they changed their name officially from Domino’s Pizza just to Domino’s. They even took pizza out of the name. They’re just Domino’s.
And so they started with, I believe, possibly their mobile app. I don’t remember what was first — either the mobile app that you can use to place your orders, or they had the other campaign where they had different franchisees talking about how long they’ve owned their Domino’s store, and how they cashed in their life savings for it. And then that same individual takes a sledgehammer and starts knocking the walls down. And they were saying, “Come in and visit our redesigned stores that are all geared around a better customer experience when you’re sitting and waiting for your pizza or placing your order.”
So they started with the physical building itself and then started bringing in the technology aspects of placing your order, being able to track your order on your phone. So if you go into the Domino’s app, you order a pizza. They’ve got the little ticker bar that you can see that it’s being made. You can see when it goes into the oven, you can see when it’s out for delivery.
So they’re giving that feedback to the customer. I mean, I remember growing up, we called in to order a pizza for delivery and it’s not there yet. And so we’d have to call back. We’d have to pause the movie, the VHS tapes that we were watching and call back and say, hey, where’s the pizza? When can we expect it? You know, my parents had three little kids that were getting hungry waiting for their cheese pizza.
Now that headache is gone; they removed that piece so you can track it the whole way. And I started telling these stories to customers then. And since then, it’s been the dinner bell app and it can pair with your Apple Watch if you have wearable devices. So, you know, you get a little buzz when your pizza’s ready. Additionally, they have the hotspots that they came out with. So you’re out at a park or you’re tailgating. If you go to one of those Domino’s hotspots, they can deliver to you wherever you are.
And so this is what’s been interesting about telling this story to customers is that all the new commercials continue to follow that pattern. They are all-in on this advertising and promoting the experience of what it’s like to order Domino’s. Not just, “Hey, here’s our cheese pizza, it’s $5.99 carry out.” It’s specifically the experience.
And now they are even showing, the last weekend when I was watching college football, it was all about their delivery or pizza insurance. So if you get your pizza and it’s got the wrong toppings, or it’s cold, or something else is wrong with it, they’ll send you a new one. Which is not new; every pizza company will do that. But they’re promoting it as an additional service and they’re maybe taking out some of that, “Is this something that I should do; should I call and complain about the pizza,” when they say that this is our expectation of you, our customers, that if you’re not happy and if there’s anything wrong with your pizza, we’re asking you to call us back. In fact, we put this program in and we want you to use it takes the burden off of the customer saying, I don’t know if I want to be that customer. And if they don’t, then ultimately they’re still left with a bad experience. And so they’re constantly finding new ways to improve what it means to be a customer of Domino’s.
(Jeremy Cross) Well, and I even remember the different pieces of technology that they have integrated into the experience. They had introduced — I think this goes back a few years — maybe 2015 or 2016. They introduced those vehicles — the DXP vehicles — that were the heating oven vehicles. I think they ended up having anywhere between 100 and 200 of them on the road actually delivering. But it was a heated oven. And it seems kind of gimmicky, but at the same time it creates buzz.
It creates buzz around that, and they’re focusing on making sure, “Yeah we could come to your door with one of those heated sleeve bags and open it up and pull your pizza out perfectly fine.” But I think then that’s evolved; that’s pushed them to this: “All right. Well, we have pizza insurance. If it gets there and it’s not the way that is supposed to be, we’ll take care of it.”
(Ryan Kubec) Yeah. I don’t know; this is the technologist part of me that gets my brain going. And these are actually some of the conversations that we get into with our customers as they start saying, “All right, how do we take that model and apply that?” If they don’t do it now, maybe if Domino’s is listening, they can take this idea of throwing an IoT device that’s measuring temperature into those bags so you can track not only where your pizza is, but what the temperature is in real time, the whole way to your house, and then have alerts set up that if on the way there it falls beneath a certain temperature, that driver automatically will know to go back to the store. It will automatically trigger the store to put a new pizza in because it didn’t get delivered on time and alert the customer that this pizza is going to be 50 percent off because it wasn’t going to meet their quality standards when it got there.
So you can start proactively meeting the needs of the customers and maybe alleviate the need for that insurance by using technology to improve that customer experience. And, if you got an alert from Domino’s or any food company that says, hey, your pizza is going to be 15 minutes later, we put a new one in because we were tracking the temperature of the pizza and didn’t want to give you cold pizza. That’s where you start getting down the path of what you can do.
It’s interesting. The companies that we work with after telling a story about little old pizza place Domino’s, how they’re embracing this. It’s really when someone says, “You know what would be really cool is if we could do this,” or “In a perfect world, we’d be able to ….” Whenever I hear that from the companies we work with, it’s like … that’s what we need to be trying to do. By getting those creative juices flowing because people look at their processes as-is and say, how do we improve this process? And they don’t think, let’s scrap this, and if we were starting from scratch, what would the perfect process be?
(Jeremy Cross) So we’ve talked about Domino’s. We identified them as being winners within the customer experience space. They’ve really been proving that, and within the pizza industry they are certainly winning. But what I want to talk about right now is why are they winning? What is it about what they’ve been doing? What are the takeaways that we could learn from Domino’s and why they’ve had this success?
(Ryan Kubec) Sure. So definitely they’re winning in the pizza industry and they’re pretty frequently referenced as kind of a go-to or an example in the CX space regardless of industry. So really I think that if we’re going to talk about takeaways, about what someone can take away and say, “All right, how do we follow or model ourselves after what Domino’s did, or learn from what they did?” I think we can boil that down to three points. The first one being that you need to take a pretty honest self-assessment as to where you are and what does your customer experience look like.
And in the Domino’s case, they got feedback from their customers and they didn’t try to pretty it up or gloss over it. They just looked at it and said, all right, this is where we are, now where do we go? So doing a good self-assessment, figuring out really what your current positioning is. And I think that will also possibly inform where are your bigger areas that need more attention rather than saying, “Hey, let’s just start somewhere, anywhere.” So that’s one takeaway of something they did well.
(Jeremy Cross) What is number two on your list?
(Ryan Kubec) Yeah, so number two would be their willingness to look at themselves as not just a pizza delivery company, but to say, let’s look outside our industry. Let’s look at what’s happening in the e-commerce world. How are they serving their customers? I don’t know what other industries they looked at, but that would be the next takeaway — don’t just look at how you are doing compared to the competition. Look at who is doing this best in any industry. Whose website do you think has the best design? Whose customer service is the best when you call in, whether that’s calling into your insurance company, calling into fast food delivery or something like that. What applications do you have on your phone or on your tablet that you interact with that are the best? What banking system has it right?
So taking a look across industries and figuring out where those pieces are, and that’s kind of what Domino’s did. If they just compared themselves to other pizza delivery places, I don’t think they would have made the strides that they did. But they started looking at themselves and taking that creative approach. And that really isn’t what transforms. You know, people talk about we want to transform our business and we want to transform our customer experience. You don’t do that by just looking at what you’re doing today and what your competitors are doing. You kind of have to branch out and look at the best of customer experience across industries.
(Jeremy Cross) What would be your third and final takeaway point?
(Ryan Kubec) The third and final takeaway from the Domino’s example would be to get started somewhere. It’s easy to say, all right, we’ve got this huge process, we need to figure out how to fix this thing end to end. And you can turn it into a four-year endeavor without making any real improvements. And Domino’s didn’t do that. And, honestly, the clients that we work with, we wouldn’t recommend that they do a Big-Bang approach either. Identify some of your key areas, pick one and get started on that.
And that’s kind of the approach they [Domino’s] took. They started with the brick-and-mortar stores and redesigning those. And then, six months to a year later, they rolled out the updated features on their application, on their mobile app, of being able to track your pizza all the way to when it’s delivered to your house. And then they’ve continued down that path of every six to eight months they’re rolling out some new feature.
And so if you can follow that same model, that breaks it down into smaller chunks; that allows most companies to digest it and say, what’s our budget and time commitment that we’re going to have to throw at this? It doesn’t have to be this humongous project. You can do these in smaller bite-sized pieces that have great impact on your customers. The flip side is that it allows your customers to adjust, as well. If you completely revamp the way they interact with your business, you run the risk of it almost being too overwhelming and too different of an experience. So if you can slowly improve it.
My boss in his email signature has the phrase, “Incremental improvement is better than postponed perfection” (and I’ll get some brownie points for shouting him out on the podcast here…). But that’s a mantra that I think fits really well with customer experience and enterprise. That you don’t have to have that perfect process the day that you go live with the solution, start making those improvements now, and that’s going to increase the likelihood that you’re going to increase your customer retention, and then you’re able to build on that over time.
And you can tie that in with your more traditional channels. So oddly enough, using the Domino’s example, I’ve got a marketing automation email that I received today from Domino’s promoting their $7.99 if you order two large pizzas or something like that. So it’s even though we talked about them going this non-traditional route, not promoting like the other TV commercials, their standard promotions or what prices you’re going to get for what pizza, they’re able to still do those more traditional promotions through traditional marketing channels and have that all tied into a larger strategy. So you can still engage with your customers on multiple fronts doing the traditional pieces and some of the non-traditional pieces as well.
(Jeremy Cross) Yeah, I think what is interesting about watching the Domino’s story is that it continues to evolve. You’re right; they take a step and then they expand upon that. They didn’t do it all at once. And like you said, they started with brick-and-mortar stores and they started with their product … they started with their pizza.
You know, they started from those pieces and then they realized, let’s go ahead and create a pizza tracker. And then that pizza tracker revolutionized — it had not been done before. And then that led to other investments in their mobile application or in the digital experience because they looked at data.
I mean, if you want to consider them [Domino’s] and looking at their digital transformation, it has been data driven from the beginning. So whether that is from the consumer feedback that prompted them to change their product … then they looked at where are orders coming from, how are we getting our orders? And when they realized that they were getting them digitally, they went all-in. They revolutionized that experience, but they didn’t do it all at once. They looked at the data. They said, let’s make these changes. And it’s been a very interesting thing to see where their story has gone from each of those decisions that they’ve made. So I have to say, I’m finding it to be very interesting to see where they’re going to go next and definitely think that they are a winner within the CX space.
(Jeremy Cross) So, like I said at the beginning of the episode, we really wanted to focus on winners and losers, who’s leading and who’s lagging behind when it comes to CX. And we hope that in this particular episode we’ve given you a glimpse into something as unexpected as Domino’s can go from being laggards within their own industry — in fact, being considered one of the worst within their own industry — to within a 10-year timespan leading their industry; not because they’re just focused on product, but because they started to focus on customer experience.
(Ryan Kubec) Yes, absolutely.
(Jeremy Cross) So with that, thank you again for listening today. This is Jeremy and Ryan, and we hope to see you back on our next episode. Thanks.
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