Self-Deprecation Pays Dividends for Domino's

Documentary film-like ads that refer to its previous pizza crust as "cardboard" resonates with customers, with the company realizing strong sales gains.

May 10, 2011

ANN ARBOR, MI - A self-deprecating media campaign filled with documentary film-like customer comments in ads such as "Domino??s pizza crust to me is like cardboard" has begun resonating with consumers, with the pizza chain delivering a quarter of rising profits and revenues, the Financial Times reports.

According to Patrick Doyle, Domino??s CEO, the apologetic ad campaign has been a "transformation," renewing a bond between the company and its customers.

"We spent tens of millions of dollars repeating the negative, with consumers saying our pizza tastes like cardboard," Doyle said. "[But] we are in a dramatically different place with our customers than we were prior to doing it."

Called "Pizza Turnaround," the ad campaign took an unconventional marketing approach, one fraught with risks

"It was a classic two-sided argument," said Kevin Lane Keller, professor of marketing at Dartmouth College. "You admit that you did some things wrong and that you??ll address it going forward. But that approach is rare in business."

"We [broke] every single rule in advertising," Doyle conceded. "[And] every time we break a rule, we get a little bit nervous."

According to Tom Bernthal, a partner at Kelton Research, the approach smacked of honesty, which is a rarity in today??s ad marketplace.

"Companies so often say they??ve gotten better, that they??re new and improved," Bernthal said. "But these phrases have become so ubiquitous that they have no resonance with consumers anymore."

Domino??s integrated its approach online, using social media to allow customers to share their opinions of the company??s pizza ?" for better or worse.

As a result, the company??s Facebook page grew from 400,000 fans last year to 2.6 million today, and it used customer feedback to further tweak its pizza strategy.

First quarter sales for Domino??s U.S. stores were up 14.3 percent year-on-year in the first quarter of 2010. Additionally, domestic same-store sales are up 12.9 percent in the past two years, compared with 5.7 percent for Papa John??s and 2 percent for Pizza Hut.

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