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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

Unsolicited Business Advice: Is Domino’s New Core Pizza Recipe Change the New “New Coke”?

Written By: Carol Roth | Comments Off on Unsolicited Business Advice: Is Domino’s New Core Pizza Recipe Change the New “New Coke”?
Is completely changing the choice of millions of your customers the best way to go?

Recently Domino’s Pizza announced through a series of commercials that it was changing the formula for its signature pizza entirely because the pizza, of which they sold over 400 million in the US alone last year, was basically crappy.  Yes, the commercials show focus groups of people trashing Domino’s pizza and then the Domino’s folks say something along the lines of: we agree and we are going to do something about it by chucking the recipe and starting over.

I can understand their desire to make changes; their same store sales (measuring sales in the same restaurant for one period over the same period in the previous year) have been flat to down domestically over the first three quarters of 2009 in the US.  And I also understand the chain is known more for their price and convenience than their pizza’s taste, but there are a lot of loyal Domino’s customers that really like their pizza. 

Instead of introducing a second upgraded option (which, to be fair, could be difficult logistically for their small store footprint) or making small changes to freshen things up a bit, they are scrapping the whole damn recipe.  Almost nothing in the product itself remains the same, from the crust to the sauce and so on.  This is potentially a big “FU” to their loyal customers who may not want a garlic, butter and parsley crust, different cheese or a sweeter sauce with a kick and now have no choice to get the iconic- even if a bit boring- pizza they have been used to for decades.

This situation potentially has “New Coke” debacle written all over it (for those of you asleep during the mid-80s, this is when Coke changed its iconic formula to the dismay of millions and then changed it back because of the backlash).  While the new Domino’s recipe may (or may not) attract new customers, it has the potential to lose some of Domino’s biggest fans, who will likely feel betrayed by the action.  And it is much easier to sell more pizza and extras to your existing customers than to get new customers, so we will see how this maneuver plays out for Domino’s over time.

The takeaway: If you have loyal customers, don’t just take away their core offering, especially if you have a strong fan base that has a history with your products and that accounts for a large percent of your sales.  Supplement it, upgrade, freshen it up, but don’t tell your customers they are idiots for buying your crappy product.

Article written by
Carol Roth is a national media personality, ‘recovering’ investment banker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett (Shark Tank, The Voice, Survivor, The Apprentice) produced technology competition series, America's Greatest Makers, airing on TBS and Host of Microsoft's Office Small Business Academy show. Previously, Carol was the host and co-producer of The Noon Show, a current events talk show on WGN Radio, one of the top stations in the country, and a contributor to CNBC, as well as a frequent guest on Fox News, CNN, Fox Business and other stations. Carol's multimedia commentary covers business and the economy, current events, politics and pop culture topics. Carol has helped her clients complete more than $2 billion in capital raising and M&A transactions. She is a Top 100 Small Business Influencer (2011-2015) and has her own action figure. Twitter: @CarolJSRoth